EMPLOYMENT AGREEMENT
Amendment to Employment AgreementChange in Control AgreementAmendment to Severance Agreement
EXECUTION COPY
EXECUTIVE EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated as of July 12, 2004,
between Champion Enterprises, Inc., a Michigan corporation (the "Company"), and
William C. Griffiths (the "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to employ the Executive as Chief Executive
Officer of the Company;
WHEREAS, the Company and the Executive desire to enter into the
Agreement as to the terms of his employment by the Company;
NOW THEREFORE, in consideration of the foregoing, of the mutual
promises contained herein and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. POSITION/DUTIES.
(a) During the Employment Term (as defined in Section 2 below), the
Executive shall serve as the Chief Executive Officer of the Company. In this
capacity, the Executive shall have such duties, authorities and responsibilities
commensurate with the duties, authorities and responsibilities of persons in
similar capacities in similarly sized companies, and such other duties,
authorities and responsibilities as the Board of Directors of the Company (the
"Board") shall designate that are consistent with the Executive's position as
Chief Executive Officer of the Company. The Executive shall report to the Board.
(b) During the Employment Term, the Executive shall devote all of his
business time, energy and skill and his best efforts to the performance of his
duties with the Company, provided the foregoing shall not prevent the Executive
from (i) serving on the board of directors of non-profit organizations and, with
the prior written approval of the Board, other companies, (ii) participating in
charitable, civic, educational, professional, community or industry affairs and
(iii) managing his and his family's passive personal investments so long as such
activities in the aggregate do not interfere or conflict with his duties
hereunder or create a potential business conflict.
(c) The Board shall take such action as may be necessary to appoint or
elect the Executive as a member of the Board as of the Effective Date.
Thereafter, during the Employment Term, the Board shall nominate the Executive
for re-election as a member of the Board at the expiration of the then current
term, provided that the foregoing shall not be required to the extent prohibited
by legal or regulatory requirements.
2. EMPLOYMENT TERM. The Executive's term of employment under this
Agreement shall be for a term commencing on August 1, 2004 (the "Effective
Date") and, unless terminated earlier as provided in Section 8, ending on
December 31, 2008 (the "Employment Term").
3. BASE SALARY. The Company agrees to pay the Executive a base salary
at an annual rate of not less than $600,000, payable in accordance with the
regular payroll practices of the Company, but not less frequently than monthly.
The Executive's Base Salary shall be subject to annual review by the Board (or a
committee thereof) and may be increased, but not decreased, from time to time by
the Board. The base salary as determined herein from time to time shall
constitute "Base Salary" for purposes of this Agreement.
4. BONUS. (a) During the Employment Term, the Executive shall be
eligible for an annual discretionary incentive payment under the Company's 1995
Stock Option and Incentive Plan, as amended (the "1995 Plan") or any successor
annual bonus plan with a target of at least 100% of Executive's then-current
Base Salary (the "Target Bonus") and with a potential maximum annual incentive
payment of 200% of Executive's then-current Base Salary (as prorated for partial
years), upon the attainment of one or more pre-established performance goals
established by the Board or the Company's Compensation and Human Resources
Committee (the "Compensation Committee"). Executive acknowledges that currently
any annual bonus amounts earned by Executive in excess of the Target Bonus shall
be deferred automatically and paid to the Executive in discounted restricted
stock in accordance with Company policy. Executive further acknowledges that
such policy may be changed in the future in Company's sole discretion. The
Executive shall be guaranteed a minimum annual cash bonus for 2004 of $170,000,
provided he is employed by the Company at the time bonuses are paid for 2004 or
as otherwise provided herein, but in no event later than March 31, 2005.
(b) Within 30 days after the Effective Date, the Company shall pay the
Executive a one-time lump sum cash payment in the amount of $200,000 (the
"Sign-On Bonus"). In the event the Executive's employment with the Company
terminates as a result of a termination by the Company for Cause (as defined in
Section 8(c)) or by the Executive without Good Reason (as defined in Section
8(e)) at any time during the 24-month period commencing on the Effective Date,
the Executive shall be required to pay the Company an amount equal to the
Sign-On Bonus. Such amount shall be paid to the Company no later than 30 days
following such termination date and, at the Company's election, the Company may
offset such amount against any amount owed by the Company to the Executive.
5. EQUITY AWARDS.
(a) 2004 STOCK OPTION. The Compensation Committee shall grant the
Executive a stock option (the "Option") to purchase 100,000 shares of the
Company's common stock, par value $1.00 (the "Common Stock") at an exercise
price equal to the fair market value of the Common Stock on the Effective Date.
Subject to the Executive's continued employment by the Company through each
vesting date, the Option shall vest and become exercisable in three equal annual
installments on the first, second and third anniversaries of the Effective Date.
The Option shall be for a term of five years, subject to earlier termination as
provided in the 1995 Plan or herein. The Option shall be granted pursuant to,
and shall be subject to, the terms and conditions of the 1995 Plan and the
Company's standard stock option agreement.
(b) 2004 PERFORMANCE SHARE AWARD. The Compensation Committee shall
grant the Executive a performance share award (the "Performance Share Award")
for that number of shares of Common Stock that have a Fair Market Value (as
defined in the 1995 Plan)
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of $1,200,000 on the Effective Date. Subject to the Executive's continued
employment by the Company through the third anniversary of the Effective Date
(i) 50% of the Performance Share Award shall vest on the third anniversary of
the Effective Date if the applicable performance goals have been attained (the
"Conditional PSA Portion") and (ii) 50% of the Performance Share Award shall
vest on the third anniversary of the Effective Date without regard to
performance goals (the "Time PSA Portion"); provided, however, that
notwithstanding the foregoing, if the Executive's employment by the Company is
terminated by the Company without Cause or by the Executive for Good Reason
prior to the third anniversary of the Effective Date then (x) if such
termination date is after February 28, 2005, two-thirds of the shares subject to
the Time PSA Portion shall vest on such termination and (y) if such termination
date is after February 28, 2006, all of the shares subject to the Time PSA
Portion shall vest on such termination date. The Conditional PSA Portion shall
be earned to the extent cumulative performance goals for 2004-2006 have been
achieved. Such structure and goals shall be similar to those currently existing
for the 2004 performance share awards for other senior executives of the
Company, but adjusted to reflect the Effective Date. The Performance Share Award
shall be granted pursuant to, and shall be subject to, the terms and conditions
of the 1995 Plan and the Company's performance share award agreement.
(c) DISCRETIONARY LONG-TERM PERFORMANCE AWARDS. For fiscal years
beginning on and after January 1, 2005, the Executive shall be eligible to
participate in the Company's long-term performance incentive program as
generally applicable to other senior executives at a level commensurate with his
position, but any grant shall be at the sole discretion of the Board or the
Compensation Committee.
6. STOCK OWNERSHIP REQUIREMENT. The Executive shall be subject to the
terms and conditions of the Company's stock ownership requirements for senior
executives as in effect from time to time. Under the terms of the current
policy, fifty percent of the after-tax shares of Common Stock awarded to the
Executive pursuant to any annual incentive deferrals as provided in Section 4 or
performance share award pursuant to Section 5, shall be "held" by the Company in
accordance with its policies and will not be transferable by the Executive until
the Executive has accumulated 300,000 shares of the Company's Common Stock or
terminates employment. All shares of Common Stock owned outright by the
Executive shall count towards satisfying the Company's stock ownership
requirements, including shares acquired in the open market or shares retained
from the exercise of the stock option granted pursuant to Section 5.
7. EMPLOYEE BENEFITS.
(a) BENEFIT PLANS. The Executive shall be entitled to participate in
any employee benefit plan that the Company has adopted or may adopt, maintain or
contribute to for the benefit of its senior executives at a level commensurate
with his position, subject to satisfying the applicable eligibility
requirements. The Company shall use its commercially reasonable efforts to cause
the waiver of any waiting period from the Effective Date for the Executive under
any employee welfare benefit plan (as defined in Section 3(1) of the Employee
Retirement Income Security Act of 1974, as amended) other than the Company's
health plan, but at no extra cost to it and without jeopardizing tax-favored
status of any plan. The Company shall pay the Executive's (and his dependents')
premiums for continuation coverage under the health plan of his prior employer
until the Executive first becomes eligible to participate in the
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Company's health plan. Notwithstanding the foregoing, the Company may modify or
terminate any employee benefit plan at any time.
(b) VACATIONS. The Executive shall be entitled to an annual paid
vacation of four weeks per calendar year (as prorated for partial years) in
accordance with the Company's policy on accrual and use applicable to senior
executives; provided, however that at all times, the Executive shall be
reachable during vacation.
(c) BUSINESS AND ENTERTAINMENT EXPENSES. Upon presentation of
appropriate documentation, the Executive shall be reimbursed in accordance with
the Company's expense reimbursement policy, for all reasonable and necessary
business and entertainment expenses incurred in connection with the performance
of his duties hereunder.
(d) RELOCATION. The Executive shall promptly relocate to the vicinity
of the Company's current headquarters. The Executive shall be entitled to
relocation benefits commensurate with his position, in accordance with the
Company's relocation program. The Company shall pay or reimburse the Executive
for the reasonable moving and relocation expenses and costs, including
transaction costs (but not losses, fix up costs or similar costs) involved with
the sale of his current principal residence and the purchase of his new
residence. During the period prior to the Executive's relocation (but in no
event for a period in excess of 180 days), the Company shall provide suitable
temporary housing for the Executive's use while he is at the Company's
headquarters. The Company shall gross up for tax purposes any income arising
from such reimbursement that is treated as nondeductible taxable income to the
Executive so that the economic benefit is the same to the Executive as if such
payment or benefits were provided on a non-taxable basis to the Executive. All
amounts payable under this Section 7(d) shall be subject to the Executive's
presentment to the Company of appropriate documentation and shall be subject to
the limitations and procedures set forth in the Company's relocation program.
8. TERMINATION. The Executive's employment and the Employment Term
shall terminate on the first of the following to occur:
(a) DISABILITY. Upon 10 days' prior written notice by the Company to
the Executive of termination due to Disability. For purposes of this Agreement,
"Disability" shall be defined as the Executive's physical or mental incapacity
which has prevented the Executive from performing his material duties hereunder
for 180 days (including weekends and holidays) in any 365-day period or the
Board's good faith determination that the Executive will not be able to perform
his material duties for six consecutive months (including any consecutive period
of prior incapacity).
(b) DEATH. Automatically on the date of death of the Executive.
(c) CAUSE. The Company may terminate the Executive's employment
hereunder for Cause immediately upon written notice by the Company to the
Executive of a termination for Cause. "Cause" shall mean (i) the Executive's
dishonesty in his financial dealings with, or on behalf of, the Company; (ii)
the Executive's commission of, indictment for or pleading guilty or nolo
contendere to a crime by the Executive which constitutes (x) a felony (other
than a traffic related offense) or (y) a misdemeanor
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involving moral turpitude and which, in the case of (y), may reasonably be
expected to have an adverse effect on the Company, its business, reputation or
interest; (iii) Executive's material breach of this Agreement or any other
contract or agreement between the Executive and the Company, which breach, if
curable, is not cured within 20 days of the giving of written notice thereof to
the Executive; (iv) the Executive's material violation of the Company's code of
conduct, code of ethics or any other written policy or a material breach by the
Executive of a fiduciary duty or responsibility to the Company; (v) the refusal
of the Executive to follow the lawful policies and directives of the Board
within five days of the giving of written notice thereof to the Executive; (vi)
the willful misconduct or gross negligence of the Executive with regard to the
Company or in the performance of his duties that is materially injurious to the
Company; or (vii) the willful and continued failure of the Executive to attempt
to perform the Executive's duties with the Company (other than for any such
failure resulting from the Executive's incapacity due to physical or mental
illness) after written notice of such failure has been give to the Executive.
(d) WITHOUT CAUSE. Upon written notice by the Company to the Executive
of an involuntary termination without Cause, other than for death or Disability.
(e) GOOD REASON. Upon written notice by the Executive to the Company of
a termination for Good Reason. "Good Reason" shall mean the occurrence of any of
the following events, without the express written consent of the Executive,
unless such events are fully corrected in all material respects by the Company
within 30 days following written notification by the Executive to the Company
that he intends to terminate his employment hereunder for one of the reasons set
forth below:
(i) any reduction or diminution (except temporarily during any
period of physical or mental incapacity) in the Executive's titles or a
material reduction or diminution in the Executive's authorities, duties
or responsibilities or reporting requirements with the Company
including but not limited to a failure to elect the Executive to the
Board or removal of the Executive from the Board, except if such
removal is necessary as a result of legal or regulatory requirements or
the assignment to the Chairman of the Company of any or all of the
material authorities, duties or responsibilities normally assigned to
the chief executive officer; provided that if the Executive is Chairman
of the Board, removal or non-reelection of him to such position shall
not be Good Reason;
(ii) a material breach by the Company of any provisions of
this Agreement, including, but not limited to, any reduction in any
part of the Executive's Base Salary;
(iii) the failure of the Company to obtain and deliver to the
Executive a satisfactory written agreement from any successor to the
Company to assume and agree to perform this Agreement; or
(iv) the Executive is required to relocate to a principal
place of employment more than 60 miles from his principal place of
employment with the Company.
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(f) WITHOUT GOOD REASON. Upon 60 days' prior written notice by the
Executive to the Company of the Executive's voluntary termination of employment
without Good Reason (which the Company may, in its sole discretion, make
effective earlier than any notice date).
9. CONSEQUENCES OF TERMINATION.
(a) DISABILITY. Upon such termination, the Company shall pay or provide
the Executive (i) any unpaid Base Salary through the date of termination; (ii)
any bonus earned but unpaid with respect to the fiscal year ending on or
preceding the date of termination; (iii) reimbursement for any unreimbursed
expenses incurred through the date of termination; (iv) a pro-rata portion of
the Executive's bonus for the fiscal year in which the Executive's termination
occurs based on actual results for the plan year (determined by multiplying the
amount of such bonus which would be due for the full fiscal year by a fraction,
the numerator of which is the number of days during the fiscal year of
termination that the Executive is employed by the Company and the denominator of
which is 365); (v) any accrued but unused vacation time in accordance with
Company policy; and (vi) any benefits or rights to equity interests in
accordance with applicable plans and grants (collectively items (i) through (vi)
shall be hereafter referred to as "Accrued Benefits").
(b) DEATH. In the event the Employment Term ends on account of the
Executive's death, the Executive's estate shall be entitled to any Accrued
Benefits.
(c) TERMINATION FOR CAUSE OR WITHOUT GOOD REASON. If the Executive's
employment should be terminated (x) by the Company for Cause, or (y) by the
Executive without Good Reason or (z) upon expiration of the Term on the fourth
anniversary of the Effective Date, the Company shall pay to the Executive any
Accrued Benefits (other than, in the case of (x) or (y), those described in
Sections 8(a)(ii) and 8(a)(iv)).
(d) TERMINATION WITHOUT CAUSE OR FOR GOOD REASON. If the Executive's
employment by the Company is terminated (x) by the Company other than for Cause
or (y) by the Executive for Good Reason, the Company shall pay or provide the
Executive with (i) Accrued Benefits; and (ii) subject to the Executive's
compliance with the obligations in Sections 10, 12 and 13 hereof, an amount
equal to the Executive's monthly Base Salary rate (but not as an employee) which
would continue to be paid monthly for a period of 24 months. Payments provided
in this Section 9(d) shall be in lieu of any termination or severance payments
or benefits for which the Executive may be eligible under any of the plans,
policies or programs of the Company.
10. RELEASE. Any and all amounts payable and benefits or additional
rights provided pursuant to this Agreement beyond Accrued Benefits shall only be
payable if the Executive delivers to the Company and does not revoke a general
release of all claims in such form as required by the Company.
11. CHANGE IN CONTROL AGREEMENT/EXCISE TAX. The Executive and the
Company will promptly after the execution of this Agreement enter into the
Company's current standard form of change in control severance agreement (the
"Standard Change in
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Control Agreement"), except that the Executive's agreement shall be for a term
of two years, shall be based on a multiple of two times Base Salary and bonus
for severance, and in lieu of the provision in the Standard Change in Control
Agreement as to Internal Revenue Code Section 280G, the provisions of Exhibit A
shall apply.
12. (a) CONFIDENTIALITY. The Executive agrees that he shall not,
directly or indirectly, use, make available, sell, disclose or otherwise
communicate to any person, other than in the course of the Executive's assigned
duties and for the benefit of the Company, either during the period of the
Executive's employment or at any time thereafter, any nonpublic, proprietary or
confidential information, knowledge or data relating to the Company, any of its
subsidiaries, affiliated companies or businesses, which shall have been obtained
by the Executive during the Executive's employment by the Company. The foregoing
shall not apply to information that (i) was known to the public prior to its
disclosure to the Executive; (ii) becomes generally known to the public
subsequent to disclosure to the Executive through no wrongful act of the
Executive or any representative of the Executive; or (iii) the Executive is
required to disclose by applicable law, regulation or legal process (provided
that the Executive provides the Company with prior notice of the contemplated
disclosure and reasonably cooperates with the Company at its expense in seeking
a protective order or other appropriate protection of such information).
(b) NONSOLICITATION. During the Executive's employment with the Company
and for the two year period thereafter, the Executive agrees that he will not,
except in the furtherance of his duties hereunder, directly or indirectly,
individually or on behalf of any other person, firm, corporation or other
entity, (i) solicit, aid or induce any employee, representative or agent of the
Company or any of its subsidiaries or affiliates to leave such employment or
retention or to accept employment with or render services to or with any other
person, firm, corporation or other entity unaffiliated with the Company or hire
or retain any such employee, representative or agent, or take any action to
materially assist or aid any other person, firm, corporation or other entity in
identifying, hiring or soliciting any such employee, representative or agent,
(ii) solicit, aid or induce any customer of the Company or any of its
subsidiaries or affiliates to purchase goods or services then sold by the
Company or any of its subsidiaries or affiliates from another person, firm,
corporation or other entity or assist or aid any other persons or entity in
identifying or soliciting any such customer or (iii) solicit, aid or induce any
vendor of the Company or any of its subsidiaries or affiliates to provide goods
or services then provided to the Company or any of its subsidiaries or
affiliates to another person, firm, corporation or other entity or assist or aid
any other persons or entity in identifying or purchasing goods or services from
such vendor. An employee, representative or agent shall be deemed covered by
this paragraph while so employed or retained and for six months thereafter.
Subpart (ii) shall not be violated by general advertising or solicitation not
specifically targeted at activities of the Company.
(c) NONCOMPETITION. The Executive acknowledges that he performs
services of a unique nature for the Company that are irreplaceable, and that his
performance of such services to a competing business will result in irreparable
harm to the Company. Accordingly, during the Executive's employment hereunder
and for the two year period thereafter, the Executive agrees that the Executive
will not, directly or indirectly, own, manage, operate, control, be employed by
(whether as an employee, consultant, independent contractor or
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otherwise, and whether or not for compensation) or render services to any
person, firm, corporation or other entity, in whatever form, engaged in the
production, sales or marketing of manufactured housing or any other material
business in which the Company or any of its subsidiaries or affiliates is
engaged on the date of termination (or, if earlier, the date of determination)
or in which they have planned, on or prior to such date, to be engaged in on or
after such date, in any locale of any country in which the Company conducts
business. This Section 12(c) shall not prevent the Executive from owning not
more than two percent of the total shares of all classes of stock outstanding of
any publicly held entity engaged in such business.
(d) NONDISPARAGEMENT. The Executive shall not make or induce other
persons or entities to make any negative statements as to the Company, its
affiliates, employees, past or present officers, directors, products, services,
businesses or reputation. Notwithstanding the foregoing, truthful statements
made in the course of sworn testimony in administrative, judicial or arbitral
proceedings (including, without limitation, depositions in connection with such
proceedings) shall not be subject to this Section 12(d).
(e) REFORMATION. If it is determined by a court of competent
jurisdiction in any state that any restriction in this Section 12 is excessive
in duration or scope or is unreasonable or unenforceable under the laws of that
state, it is the intention of the parties that such restriction may be modified
or amended by the court to render it enforceable to the maximum extent permitted
by the law of that state.
(f) SURVIVAL OF PROVISIONS. The obligations contained in this Section
12 shall survive the termination or expiration of the Executive's employment
with the Company and shall be fully enforceable thereafter.
13. COOPERATION. Upon the receipt of reasonable notice from the Company
(including outside counsel), the Executive agrees that while employed by the
Company and thereafter, the Executive will respond and provide information with
regard to matters in which he has knowledge as a result of his employment with
the Company, and will provide reasonable assistance to the Company, its
affiliates and their respective representatives in defense of any claims that
may be made against the Company or its affiliates, and will assist the Company
and its affiliates in the prosecution of any claims that may be made by the
Company or its affiliates, to the extent that such claims may relate to the
period of the Executive's employment with the Company. The Executive agrees to
promptly inform the Company if he becomes aware of any lawsuits involving such
claims that may be filed or threatened against the Company or its affiliates.
The Executive also agrees to promptly inform the Company (to the extent he is
legally permitted to do so) if he is asked to assist in any investigation of the
Company or its affiliates (or their actions), regardless of whether a lawsuit or
other proceeding has then been filed against the Company or its affiliates with
respect to such investigation, and shall not do so unless legally required. Upon
presentation of appropriate documentation, the Company shall pay or reimburse
the Executive for all reasonable out-of-pocket travel, duplicating or telephonic
expenses incurred by the Executive in complying with this Section 13.
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14. EQUITABLE RELIEF AND OTHER REMEDIES.
(a) The Executive acknowledges and agrees that the Company's remedies
at law for a breach or threatened breach of any of the provisions of this
Section 12 or Section 13 would be inadequate and, in recognition of this fact,
the Executive agrees that, in the event of such a breach or threatened breach,
in addition to any remedies at law, the Company, without posting any bond, shall
be entitled to obtain equitable relief in the form of specific performance,
temporary restraining order, a temporary or permanent injunction or any other
equitable remedy which may then be available.
(b) In the event of a violation of Section 12 or 13 of this Agreement,
any severance being paid to the Executive pursuant to this Agreement, the
Standard Change in Control Agreement (or any successor agreement) or otherwise
shall immediately cease.
15. NO ASSIGNMENTS.
(a) This Agreement is personal to each of the parties hereto. Except as
provided in Section 15(b) below, no party may assign or delegate any rights or
obligations hereunder without first obtaining the written consent of the other
party hereto.
(b) The Company may assign this Agreement to any successor to all or
substantially all of the business and/or assets of the Company provided the
Company shall require such successor to expressly assume and agree to perform
this Agreement and, if applicable, any Change in Control Agreement (but without
creating any rights on a second change in control), in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.
16. NOTICE. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given (i) on the date of delivery if delivered by hand,
(ii) on the date of transmission, if delivered by confirmed facsimile, (iii) on
the first business day following the date of deposit if delivered by guaranteed
overnight delivery service, or (iv) on the fourth business day following the
date delivered or mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Executive:
At the address (or to the facsimile number) shown
on the records of the Company
If to the Company:
Champion Enterprises, Inc.
2701 Cambridge Court
Suite 300
Auburn Hills, MI 48326
Attention: General Counsel
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or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
17. SECTION HEADINGS; INCONSISTENCY. The section headings used in this
Agreement are included solely for convenience and shall not affect, or be used
in connection with, the interpretation of this Agreement. In the event of any
inconsistency between the terms of this Agreement and any form, award, plan or
policy of the Company, the terms of this Agreement shall control.
18. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity of unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
19. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instruments.
20. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement or the Executive's employment with the Company,
other than injunctive relief under Section 14 hereof, shall be settled
exclusively by arbitration, conducted before a single arbitrator in Detroit,
Michigan (applying Michigan law) in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association then
in effect. The decision of the arbitrator will be final and binding upon the
parties hereto. Judgment may be entered on the arbitrator's award in any court
having jurisdiction. The parties acknowledge and agree that in connection with
any such arbitration and regardless of outcome (a) each party shall pay all its
own costs and expenses, including without limitation its own legal fees and
expenses, and (b) joint expenses shall be borne equally among the parties.
21. INDEMNIFICATION. The Company hereby agrees to indemnify the
Executive and hold him harmless to the extent provided under the by-laws of the
Company against and in respect to any and all actions, suits, proceedings,
claims, demands, judgments, costs, expenses (including reasonable attorney's
fees), losses, and damages resulting from the Executive's good faith performance
of his duties and obligations with the Company. This obligation shall survive
the termination of the Executive's employment with the Company.
22. LIABILITY INSURANCE. The Company shall cover the Executive under
directors and officers liability insurance both during and, while potential
liability exists, after the term of this Agreement in the same amount and to the
same extent as the Company covers its other officers and directors.
23. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer or director as may be
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. This Agreement together with all exhibits hereto sets
forth the entire
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agreement of the parties hereto in respect of the subject matter contained
herein. No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which
are not expressly set forth in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Michigan without regard to its conflicts of law principles.
24. NO MITIGATION. In no event shall the Executive be obliged to seek
other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement, nor
shall the amount of any payment hereunder be reduced by any compensation earned
by the Executive as a result of employment by another employer, except as
provided in Section 14(b) hereof.
25. REPRESENTATIONS. The Executive represents and warrants to the
Company that he has the legal right to enter into this Agreement and to perform
all of the obligations on his part to be performed hereunder in accordance with
its terms and that he is not a party to any agreement or understanding, written
or oral, which could prevent him form entering into this Agreement or performing
all of his obligations hereunder.
26. WITHHOLDING. The Company may withhold from any and all amounts
payable under this Agreement such federal, state and local taxes as may be
required to be withheld pursuant to any applicable law or regulation.
27. COUNSEL FEES: Upon presentation of appropriate documentation, the
Company shall pay the Executive's reasonable counsel fees (based on the lowest
standard hourly rate of such counsel) incurred in connection with entering this
Agreement, up to a maximum of $10,000.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
CHAMPION ENTERPRISES, INC.
By: /s/ Robert W. Anestis
---------------------------------------
Name: Robert W. Anestis
Its: Chairman, Compensation and Human
Resources Committee of the Board of
Directors
WILLIAM C. GRIFFITHS
/s/ William C. Griffiths
------------------------------------------
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EXHIBIT A
GROSS-UP PROVISIONS
(a) In the event that the Executive shall become entitled to payments
and/or benefits provided by this Agreement or any other amounts in the "nature
of compensation" (whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, any person whose actions result
in a change of ownership or effective control covered by Section 280G(b)(2) of
the Code or any person affiliated with the Company or such person) as a result
of such change in ownership or effective control (collectively the "Company
Payments"), and such Company Payments will be subject to the tax (the "Excise
Tax") imposed by Section 4999 of the Code (and any similar tax that may
hereafter be imposed by any taxing authority) the Company shall pay to the
Executive an additional amount (the "Gross-Up Payment") such that the net amount
retained by the Executive, after deduction of any Excise Tax on the Company
Payments and any U.S. federal, state, and for local income or payroll tax upon
the Gross-up Payment provided for by this paragraph (a), but before deduction
for any U.S. federal, state, and local income or payroll tax on the Company
Payments, shall be equal to the Company Payments.
Notwithstanding the foregoing, if it shall be determined that the
Executive is entitled to a Gross-Up Payment, but that if the Company Payments
(other than that portion valued under Treasury Regulation Section 1.280G, Q&A
24(c)) (the "Cash Payments") are reduced by the amount necessary such that the
receipt of the Company Payments would not give rise to any Excise Tax (the
"Reduced Payment") and the Reduced Payment would not be less than 92.5% of the
Cash Payment, then no Gross-Up Payment shall be made to the Executive and the
Cash Payments, in the aggregate, shall be reduced to the Reduced Payments. If
the Reduced Payments is to be effective, payments shall be reduced in the
following order (1) acceleration of vesting of any stock options for which the
exercise price exceeds the then fair market value, (2) any cash severance based
on a multiple of Base Salary or Bonus, (3) any other cash amounts payable to the
Executive, (4) any benefits valued as parachute payments; and (5) acceleration
of vesting of any equity not covered by (1) above, unless the Executive elects
another method of reduction by written notice to the Company prior to the change
of ownership or effective control.
In the event that the Internal Revenue Service or court ultimately
makes a determination that the excess parachute payments plus the base amount is
an amount other than as determined initially, an appropriate adjustment shall be
made with regard to the Gross-Up Payment or Reduced Payment, as applicable to
reflect the final determination and the resulting impact on whether the
preceding paragraph applies.
(b) For purposes of determining whether any of the Company Payments and
Gross-up Payments (collectively the "Total Payments") will be subject to the
Excise Tax and the amount of such Excise Tax, (x) the Total Payments shall be
treated as "parachute payments" within the meaning of Section 280G(b)(2) of the
Code, and all "parachute payments" in excess of the "base amount" (as defined
under Section 280G(b)(3) of the Code) shall be treated as subject to the Excise
Tax, unless and except to the extent that, in the determination of the Company's
independent certified public accountants or tax counsel selected by such
accountants or the Company (the "Accountants") such Total Payments (in whole or
in part) either do not constitute
"parachute payments," including giving effect to the recalculation of stock
options in accordance with Treasury Regulation Section 1.280G-1, Q&A 33,
represent reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(4) of the Code in excess of the "base amount" or are
otherwise not subject to the Excise Tax, and (y) the value of any non-cash
benefits or any deferred payment or benefit shall be determined by the
Accountants in accordance with the principles of Section 280G of the Code. To
the extent permitted under Revenue Procedure 2003-68, the value determination
shall be recalculated to the extent it would be beneficial to the Company. The
determination of the Accountants shall be final and binding upon the Company and
the Executive, except to the extent provided herein with regard to Internal
Revenue Service determinations. The Company shall be responsible for all charges
of the Accountants..
(c) In the event that the Excise Tax is subsequently determined by the
Accountants to be less than the amount taken into account hereunder at the time
the Gross-up Payment is made, the Executive shall repay to the Company, at the
time that the amount of such reduction in Excise Tax is finally determined, the
portion of the prior Gross-up Payment attributable to such reduction (plus the
portion of the Gross-up Payment attributable to the Excise Tax and U.S. federal,
state and local income tax imposed on the portion of the Gross-up Payment being
repaid by the Executive if such repayment results in a reduction in Excise Tax
or a U.S. federal, state and local income tax deduction), plus interest on the
amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the
Code. The Company shall be responsible for all charges of the Accountant.
In the event that the Excise Tax is later determined by the Accountant
or the Internal Revenue Service to exceed the amount taken into account
hereunder at the time the Gross-up Payment is made (including by reason of any
payment the existence or amount of which cannot be determined at the time of the
Gross-up Payment), the Company shall make an additional Gross-up Payment in
respect of such excess (plus any interest or penalties payable with respect to
such excess) at the time that the amount of such excess is finally determined.
(d) The Gross-up Payment or portion thereof provided for in subsection
(c) above shall be paid not later than the thirtieth (30th) day following an
event occurring which subjects the Executive to the Excise Tax; provided,
however, that if the amount of such Gross-up Payment or portion thereof cannot
be finally determined on or before such day, the Company shall pay to the
Executive on such day an estimate, as determined in good faith by the
Accountant, of the minimum amount of such payments and shall pay the remainder
of such payments (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code), subject to further payments pursuant to subsection
(c) hereof, as soon as the amount thereof can reasonably be determined, but in
no event later than the ninetieth day after the occurrence of the event
subjecting the Executive to the Excise Tax. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Company to the Executive, payable on
the fifth day after demand by the Company (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code).
(e) In the event of any controversy with the Internal Revenue Service
(or other taxing authority) with regard to the Excise Tax, the Executive shall
permit the Company to control
A-2
issues related to the Excise Tax (at its expense). In the event of any
conference with any taxing authority as to the Excise Tax or associated income
taxes, the Executive shall permit the representative of the Company to accompany
the Executive, and the Executive and the Executive's representative shall
cooperate with the Company and its representative.
(f) The Executive shall promptly deliver to the Company copies of any
written communications, and summaries of any verbal communications, with any
taxing authority regarding the Excise Tax covered by this provision.
(g) Nothing in this Section is intended to violate the Sarbanes-Oxley
Act and to the extent that any advance or repayment obligation hereunder would
do so, such obligation shall be modified so as to make the advance a
nonrefundable payment to you and the repayment obligation null and void.
A-3

This
Amended
and Restated Executive Employment Agreement (the
“Agreement”) is entered into as of the 17th day of
December, 2008, by and between Champion Enterprises, Inc., a Michigan
corporation (the “Company”), and William C. Griffiths
(the “Executive”).

WITNESSETH

WHEREAS,
the Company and the Executive wish to amend and restate the Executive
Employment Agreement (the “2004 Agreement”), dated as of
July 12, 2004, in order to comply with Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”),
and the regulations and guidance promulgated thereunder
(collectively, “Code Section 409A”), and in order to
extend the term of the Agreement in accordance with Section 2
below..

NOW,
THEREFORE,
in consideration of the Executive’s continued employment and
the mutual covenants herein contained, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

1. POSITION/DUTIES.

(a)
TERM
AND POSITION. During
the Employment Term (as defined in Section 2 below), the
Executive shall serve as the Chief Executive Officer of the Company.
In this capacity, the Executive shall have such duties, authorities
and responsibilities commensurate with the duties, authorities and
responsibilities of persons in similar capacities in similarly sized
companies, and such other duties, authorities and responsibilities as
the Board of Directors of the Company (the “Board”) shall
designate that are consistent with the Executive’s position as
Chief Executive Officer of the Company. The Executive shall report to
the Board.

(b)
FULL
TIME During
the Employment Term, the Executive shall devote all of his business
time, energy and skill and his best efforts to the performance of his
duties with the Company, provided the foregoing shall not prevent the
Executive from (i) serving on the board of directors of
nonprofit organizations and, with the prior written approval of the
Board, other companies, (ii) participating in charitable, civic,
educational, professional, community or

industry
affairs and (iii) managing his and his family’s passive
personal investments so long as such activities in the aggregate do
not interfere or conflict with his duties hereunder or create a
potential business conflict.

(c)
SERVICE
ON BOARD OF DIRECTORS. During
the Employment Term, the Board shall nominate the Executive for
re-election as a member of the Board at the expiration of the then
current term, provided that the foregoing shall not be required to
the extent prohibited by legal or regulatory requirements.

2. EMPLOYMENT
TERM. The
Executive’s term of employment is for a term that commenced on
August 1, 2004 (the “Effective Date”) and, unless
terminated earlier as provided in Section 8, will end on
December 31, 2012 (the “Employment Term”).

3. BASE
SALARY. The
Company agrees to pay the Executive a base salary at an initial rate
(as of the Effective Date) of not less than $600,000, payable in
accordance with the regular payroll practices of the Company, but not
less frequently than monthly. The Executive’s Base Salary shall
be subject to annual review by the Board (or a committee thereof) and
may be increased, but not decreased, from time to time by the Board.
The base salary as determined herein from time to time shall
constitute “Base Salary” for purposes of this Agreement.

4. BONUS.
(a) During
the Employment Term, the Executive shall be eligible for an annual
discretionary incentive payment under the Company’s 1995 Stock
Option and Incentive Plan, as amended (the “1995 Plan”)
or any successor annual bonus plan with a target of at least 100% of
Executive’s then-current Base Salary (the “Target Bonus”)
and with a potential maximum annual incentive payment of 200% of
Executive’s then-current Base Salary (as prorated for partial
years), upon the attainment of one or more pre-established
performance goals established by the Board or the Company’s
Compensation and Human Resources Committee (the “Compensation
Committee”). Such bonus shall be paid in the calendar year
immediately following the calendar year in which it was earned,
unless it is deferred pursuant to the terms of an incentive plan or a
timely permitted election by the Executive.

5. EQUITY
AWARDS.
The Executive shall be eligible to participate in the Company’s
long-term performance incentive program as generally applicable to
other senior executives at a level commensurate with his position,
but any grant shall be at the sole discretion of the Board or the
Compensation Committee.

6. STOCK
OWNERSHIP REQUIREMENT. The
Executive shall be subject to the terms and conditions of the
Company’s stock ownership requirements for senior executives as
in effect from time to time. Under the terms of the current policy,
fifty percent of the after-tax shares of Common Stock awarded to the
Executive pursuant to any annual incentive deferrals as provided in
Section 4 or equity award pursuant to Section 5, shall be
“held” by the Company in accordance with its policies and
will not be transferable by the Executive until the Executive has
accumulated 250,000 shares of the Company’s Common Stock or
terminates employment. All shares of Common Stock owned outright by
the Executive shall count towards satisfying the Company’s
stock ownership requirements, including shares acquired in the open
market or shares retained from the exercise of the stock options.

2

7. EMPLOYEE
BENEFITS.

(a)
BENEFIT
PLANS. The
Executive shall be entitled to participate in any employee benefit
plan that the Company has adopted or may adopt, maintain or
contribute to for the benefit of its senior executives at a level
commensurate with his position, subject to satisfying the applicable
eligibility requirements. The Company, in the name of the Executive,
shall pay the initiation fee and monthly dues for one social club or
one country club in the proximate geographic area of the Company’s
executive offices. The Company shall use its commercially reasonable
efforts to cause the waiver of any waiting period from the Effective
Date for the Executive under any employee welfare benefit plan (as
defined in Section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended) other than the Company’s
health plan, but at no extra cost to it and without jeopardizing
tax-favored status of any plan. The Company shall pay the Executive’s
(and his dependents’) premiums for continuation coverage under
the health plan of his prior employer until the Executive first
becomes eligible to participate in the Company’s health plan.
Notwithstanding the foregoing, the Company may modify or terminate
any employee benefit plan at any time.

(b)
VACATIONS.
The
Executive shall be entitled to an annual paid vacation of four weeks
per calendar year (as prorated for partial years) in accordance with
the Company’s policy on accrual and use applicable to senior
executives; provided, however that at all times, the Executive shall
be reachable during vacation.

(c)
BUSINESS
AND ENTERTAINMENT EXPENSES AND REIMBURSEMENTS. Upon
presentation of appropriate documentation, the Executive shall be
reimbursed in accordance with the Company’s expense
reimbursement policy, for all reasonable and necessary business and
entertainment expenses incurred in connection with the performance of
his duties hereunder. Reimbursements of expenses under this Section
7(c) or under other provisions of this Agreement shall be paid as
soon as practicable but no later than the last day of the calendar
year following the calendar year in which the expenses are incurred,
and shall otherwise comply with Section 27(e).

8. TERMINATION.
For
purposes of this Agreement, a termination of employment shall not be
deemed to have occurred for purposes of any provision of this
Agreement providing for the payment of any amounts or benefits
subject to Section 409A upon or following a termination of
employment unless such termination is also a “separation from
service” within the meaning of Section 409A, and, for
purposes of any such provision of this Agreement, references to a
“termination,” “terminate,” “termination
of employment” or like terms shall mean separation from
service. The Executive’s employment and the Employment Term
shall terminate on the first of the following to occur:

(a)
DISABILITY.
Upon
10 days’ prior written notice by the Company to the
Executive of termination due to Disability. For purposes of this
Agreement, “Disability” shall be defined as the
Executive’s physical or mental incapacity which has prevented
the Executive from performing his material duties hereunder for
180 days (including weekends and holidays) in any 365-day period
or the Board’s good faith determination that the Executive will
not be able to perform his material duties for six consecutive months
(including any consecutive period of prior incapacity).
Notwithstanding the foregoing, in the event the Executive has earlier
incurred a

3

“separation
from service,” as defined in Section 409A, as a result of
a physical or mental incapacity, upon such separation from service,
the Executive shall be deemed to have incurred a Disability
termination.

(b)
DEATH.
Automatically
on the date of death of the Executive.

(c)
CAUSE.
The
Company may terminate the Executive’s employment hereunder for
Cause immediately upon written notice by the Company to the Executive
of a termination for Cause. “Cause” shall mean (i) the
Executive’s dishonesty in his financial dealings with, or on
behalf of, the Company; (ii) the Executive’s commission
of, indictment for or pleading guilty or nolo
contendere
to a crime by the Executive which constitutes (x) a felony
(other than a traffic related offense) or (y) a misdemeanor
involving moral turpitude and which, in the case of (y), may
reasonably be expected to have an adverse effect on the Company, its
business, reputation or interest; (iii) Executive’s material
breach of this Agreement or any other contract or agreement between
the Executive and the Company, which breach, if curable, is not cured
within 20 days of the giving of written notice thereof to the
Executive; (iv) the Executive’s material violation of the
Company’s code of conduct, code of ethics or any other written
policy or a material breach by the Executive of a fiduciary duty or
responsibility to the Company; (v) the refusal of the Executive
to follow the lawful policies and directives of the Board within five
days of the giving of written notice thereof to the Executive;
(vi) the willful misconduct or gross negligence of the Executive
with regard to the Company or in the performance of his duties that
is materially injurious to the Company; or (vii) the willful and
continued failure of the Executive to attempt to perform the
Executive’s duties with the Company (other than for any such
failure resulting from the Executive’s incapacity due to
physical or mental illness) after written notice of such failure has
been give to the Executive.

(d)
WITHOUT
CAUSE. Upon
written notice by the Company to the Executive of an involuntary
termination without Cause, other than for death or Disability.

(e)
GOOD
REASON. Upon
written notice by the Executive to the Company of a termination for
Good Reason. “Good Reason” shall mean the occurrence of
any of the following events, without the express written consent of
the Executive, unless such events are fully corrected in all material
respects by the Company within 30 days following written
notification by the Executive to the Company that he intends to
terminate his employment hereunder for one of the reasons set forth
below:

(i)
any reduction or diminution (except temporarily during any period of
physical or mental incapacity) in the Executive’s titles or a
material reduction or diminution in the Executive’s
authorities, duties or responsibilities or reporting requirements
with the Company including but not limited to a failure to elect the
Executive to the Board or removal of the Executive from the Board,
except if such removal is necessary as a result of legal or
regulatory requirements, or the assignment to the Chairman of the
Company of any or all of the material authorities, duties or
responsibilities normally assigned to the chief executive officer;
provided that if the Executive is Chairman of the Board, removal or
non-reelection of him to such position shall not be Good Reason;

4

(ii)
a material breach by the Company of any provisions of this Agreement,
including, but not limited to, any reduction in any part of the
Executive’s Base Salary;

(iii)
the failure of the Company to obtain and deliver to the Executive a
satisfactory written agreement from any successor to the Company to
assume and agree to perform this Agreement; or

(iv)
the Executive is required to relocate to a principal place of
employment more than 60 miles from his principal place of employment
with the Company.

(f)
WITHOUT
GOOD REASON. Upon
60 days’ prior written notice by the Executive to the
Company of the Executive’s voluntary termination of employment
without Good Reason (which the Company may, in its sole discretion,
make effective earlier than any notice date).

9. CONSEQUENCES
OF TERMINATION.

(a)
DISABILITY.
Upon
such termination, the Company shall pay or provide the Executive
(i) any unpaid Base Salary through the date of termination on
the date it would have been paid if the Executive continued
employment; (ii) any bonus earned but unpaid with respect to the
fiscal year ending on or preceding the date of termination on the
date it would have been paid if the Executive continued employment;
(iii) reimbursement for any unreimbursed expenses incurred
through the date of termination, in accordance with Section 27(e);
(iv) a pro-rata portion of the Executive’s bonus for the
fiscal year in which the Executive’s termination occurs based
on actual results for the plan year (determined by multiplying the
amount of such bonus which would be due for the full fiscal year by a
fraction, the numerator of which is the number of days during the
fiscal year of termination that the Executive is employed by the
Company and the denominator of which is 365), payable when it would
have been paid if the Executive continued employment; (v) any
accrued but unused vacation time in accordance with Company policy;
and (vi) any benefits or rights to equity interests in
accordance with applicable plans and grants (collectively items
(i) through (vi) shall be hereafter referred to as “Accrued
Benefits”).

(b)
DEATH.
In
the event the Employment Term ends on account of the Executive’s
death, the Executive’s estate shall be entitled to any Accrued
Benefits.

(c)
TERMINATION
FOR CAUSE OR WITHOUT GOOD REASON. If
the Executive’s employment should be terminated (x) by the
Company for Cause, or (y) by the Executive without Good Reason
or (z) upon expiration of the Term on the fourth anniversary of
the Effective Date, the Company shall pay to the Executive, subject
to Section 9(f), any Accrued Benefits (other than, in the case
of (x) or (y), those described in Sections 9(a)(ii) and
9(a)(iv)).

(d)
TERMINATION
WITHOUT CAUSE OR FOR GOOD REASON – CONTINUED BASE SALARY FOR 24
MONTHS. If
the Executive’s employment by the Company is terminated (x) by
the Company other than for Cause or (y) by the Executive for
Good Reason, the Company shall pay or provide the Executive with (i)
Accrued Benefits; and

5

(ii) subject
to the Executive’s compliance with the obligations in
Sections 10, 12 and 13 hereof, an amount equal to the
Executive’s monthly Base Salary rate (but not as an employee)
which would continue to be paid monthly for a period of 24 months.
Payments provided in this Section 9(d) shall be in lieu of any
termination or severance payments or benefits for which the Executive
may be eligible under any of the plans, policies or programs of the
Company.

(e)
PAYMENT
COMMENCEMENT.
Unless paid on a specified date described herein, or subject to
delayed commencement as described below, payments under Section 9
shall commence 60 days after the Executive’s termination,
but as to payments that otherwise would have been paid prior to the
60th day after termination, such amounts shall be paid in a lump sum
on such 60th day.

(f)
SIX
MONTH DELAY FOR SPECIFIED EMPLOYEES.
If the Executive is deemed on the date of termination to be a
“specified employee” within the meaning of Code
Section 409A(a)(2)(B), then with regard to any payment or the
provision of any benefit (whether under this Section 9, pursuant
to other provisions of this Agreement or otherwise) that is
considered deferred compensation under Section 409A payable on
account of a “separation from service,” such payment
shall not be paid (or commence) earlier than the date that is six
months following the termination of employment or the Executive’s
earlier death. Upon the expiration of the six month period or on the
Executive’s earlier death, all payments and benefits delayed
pursuant to this Section 9(f) (whether they would have otherwise been
payable in a single sum or in installments in the absence of such
delay) shall be paid or reimbursed to the Employee in a lump sum, and
any remaining payments and benefits due under this Agreement shall be
paid or provided in accordance with the normal payment dates
specified for them herein.

10. RELEASE.
Any
and all amounts payable and benefits or additional rights provided
pursuant to this Agreement beyond Accrued Benefits shall be
contingent upon the Executive executing and not revoking within the
revocation period, within 60 days following the effective date
of termination, a general release of all claims by the Executive
against the Company and its affiliates in such form as required by
the Company and given within seven days of termination, and all
amounts other than Accrued Benefits shall be paid on the 60th day
following the Executive’s date of termination.

11. CHANGE
IN CONTROL AGREEMENT/EXCISE TAX. The
Executive and the Company have entered into the Company’s
current standard form of change in control severance agreement (the
“Standard Change in Control Agreement”), except that the
Executive’s agreement is for a term of two years, is based on a
multiple of two times Base Salary and bonus for severance, and in
lieu of the provision in the Standard Change in Control Agreement as
to Code Section 280G, the provisions of Exhibit A apply.

12. (a)
CONFIDENTIALITY.
The
Executive agrees that he shall not, directly or indirectly, use, make
available, sell, disclose or otherwise communicate to any person,
other than in the course of the Executive’s assigned duties and
for the benefit of the Company, either during the period of the
Executive’s employment or at any time thereafter, any
nonpublic, proprietary or confidential information, knowledge or data
relating to the Company, any of its subsidiaries, affiliated
companies or businesses, which shall have been obtained by the
Executive during the Executive’s employment by the Company. The
foregoing shall not apply to information that (i)

6

was
known to the public prior to its disclosure to the Executive;
(ii) becomes generally known to the public subsequent to
disclosure to the Executive through no wrongful act of the Executive
or any representative of the Executive; or (iii) the Executive
is required to disclose by applicable law, regulation or legal
process (provided that the Executive provides the Company with prior
notice of the contemplated disclosure and reasonably cooperates with
the Company at its expense in seeking a protective order or other
appropriate protection of such information).

(b)
NONSOLICITATION.
During
the Executive’s employment with the Company and for the two
year period thereafter, the Executive agrees that he will not, except
in the furtherance of his duties hereunder, directly or indirectly,
individually or on behalf of any other person, firm, corporation or
other entity, (i) solicit, aid or induce any employee,
representative or agent of the Company or any of its subsidiaries or
affiliates to leave such employment or retention or to accept
employment with or render services to or with any other person, firm,
corporation or other entity unaffiliated with the Company or hire or
retain any such employee, representative or agent, or take any action
to materially assist or aid any other person, firm, corporation or
other entity in identifying, hiring or soliciting any such employee,
representative or agent, (ii) solicit, aid or induce any
customer of the Company or any of its subsidiaries or affiliates to
purchase goods or services then sold by the Company or any of its
subsidiaries or affiliates from another person, firm, corporation or
other entity or assist or aid any other persons or entity in
identifying or soliciting any such customer or (iii) solicit,
aid or induce any vendor of the Company or any of its subsidiaries or
affiliates to provide goods or services then provided to the Company
or any of its subsidiaries or affiliates to another person, firm,
corporation or other entity or assist or aid any other persons or
entity in identifying or purchasing goods or services from such
vendor. An employee, representative or agent shall be deemed covered
by this paragraph while so employed or retained and for six months
thereafter. Subpart (ii) shall not be violated by general
advertising or solicitation not specifically targeted at activities
of the Company.

(c)
NONCOMPETITION.
The
Executive acknowledges that be performs services of a unique nature
for the Company that are irreplaceable, and that his performance of
such services to a competing business will result in irreparable harm
to the Company. Accordingly, during the Executive’s employment
hereunder and for the two year period thereafter, the Executive
agrees that the Executive will not, directly or indirectly, own,
manage, operate, control, be employed by (whether as an employee,
consultant, independent contractor or otherwise, and whether or not
for compensation) or render services to any person, firm, corporation
or other entity, in whatever form, engaged in the production, sales
or marketing of manufactured housing or any other material business
in which the Company or any of its subsidiaries or affiliates is
engaged on the date of termination (or, if earlier, the date of
determination) or in which they have planned, on or prior to such
date, to be engaged in on or after such date, in any locale of any
country in which the Company conducts business. This Section 12(c)
shall not prevent the Executive from owning not more than two percent
of the total shares of all classes of stock outstanding of any
publicly held entity engaged in such business.

(d)
NONDISPARAGMENT.
The
Executive shall not make or induce other persons or entities to make
any negative statements as to the Company, its affiliates, employees,
past or present officers, directors, products, services, businesses
or reputation. Notwithstanding the foregoing, truthful statements
made in the course of sworn testimony in administrative,

7

judicial
or arbitral proceedings (including, without limitation, depositions
in connection with such proceedings) shall not be subject to this
Section 12(d).

(e)
REFORMATION.
If
it is determined by a court of competent jurisdiction in any state
that any restriction in this Section 12 is excessive in duration
or scope or is unreasonable or unenforceable under the laws of that
state, it is the intention of the parties that such restriction may
be modified or amended by the court to render it enforceable to the
maximum extent permitted by the law of that state.

(f)
SURVIVAL
OF PROVISIONS. The
obligations contained in this Section 12 shall survive the
termination or expiration of the Executive’s employment with
the Company and shall be fully enforceable thereafter.

13. COOPERATION.
Upon
the receipt of reasonable notice from the Company (including outside
counsel), the Executive agrees that while employed by the Company and
thereafter, the Executive will respond and provide information with
regard to matters in which he has knowledge as a result of his
employment with the Company, and will provide reasonable assistance
to the Company, its affiliates and their respective representatives
in defense of any claims that may be made against the Company or its
affiliates, and will assist the Company and its affiliates in the
prosecution of any claims that may be made by the Company or its
affiliates, to the extent that such claims may relate to the period
of the Executive’s employment with the Company. The Executive
agrees to promptly inform the Company if he becomes aware of any
lawsuits involving such claims that may be filed or threatened
against the Company or its affiliates. The Executive also agrees to
promptly inform the Company (to the extent he is legally permitted to
do so) if he is asked to assist in any investigation of the Company
or its affiliates (or their actions), regardless of whether a lawsuit
or other proceeding has then been filed against the Company or its
affiliates with respect to such investigation, and shall not do so
unless legally required. Upon presentation of appropriate
documentation, the Company shall pay or reimburse the Executive for
all reasonable out-of-pocket travel, duplicating or telephonic
expenses incurred by the Executive in complying with this Section 13,
in accordance with Section 27(c).

14. EQUITABLE
RELIEF AND OTHER REMEDIES.

(a)
EQUITABLE
RELIEF. The
Executive acknowledges and agrees that the Company’s remedies
at law for a breach or threatened breach of any of the provisions of
Section 12 or Section 13 would be inadequate and, in
recognition of this fact, the Executive agrees that, in the event of
such a breach or threatened breach, in addition to any remedies at
law, the Company, without posting any bond, shall be entitled to
obtain equitable relief in the form of specific performance,
temporary restraining order, a temporary or permanent injunction or
any other equitable remedy which may then be available.

(b) In
the event of a violation of Section 12 or 13 of this Agreement,
any severance being paid to the Executive pursuant to this Agreement,
the Standard Change in Control Agreement (or any successor agreement)
or otherwise shall immediately cease.

8

15. NO
ASSIGNMENTS.

(a) This
Agreement is personal to each of the parties hereto. Except as
provided in Section 15(b) below, no party may assign or delegate any
rights or obligations hereunder without first obtaining the written
consent of the other party hereto.

(b) The
Company may assign this Agreement to any successor to all or
substantially all of the business and/or assets of the Company
provided the Company shall require such successor to expressly assume
and agree to perform this Agreement and, if applicable, any Change in
Control Agreement (but without creating any rights on a second change
in control), in the same manner and to the same extent that the
Company would be required to perform it if no such succession had
taken place.

16. NOTICE.
For
the purpose of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be
deemed to have been duly given (i) on the date of delivery if
delivered by hand, (ii) on the date of transmission, if
delivered by confirmed facsimile, (iii) on the first business
day following the date of deposit if delivered by guaranteed
overnight delivery service, or (iv) on the fourth business day
following the date delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed
as follows:

If
to the Executive:

At
the address (or to the facsimile number) shown on therecords of
the Company

or
to such other address as either party may have furnished to the other
in writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.

17. SECTION
HEADINGS; INCONSISTENCY. The
section headings used in this Agreement are included solely for
convenience and shall not affect, or be used in connection with, the
interpretation of this Agreement. In the event of any inconsistency
between the terms of this Agreement and any form, award, plan or
policy of the Company, the terms of this Agreement shall control.

18. SEVERABILITY.
The
provisions of this Agreement shall be deemed severable and the
invalidity of unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof.

9

19. COUNTERPARTS.
This
Agreement may be executed in several counterparts, each of which
shall be deemed to be an original but all of which together will
constitute one and the same instruments.

20. ARBITRATION.
Any
dispute or controversy arising under or in connection with this
Agreement or the Executive’s employment with the Company, other
than injunctive relief under Section 14 hereof, shall be settled
exclusively by arbitration, conducted before a single arbitrator in
Detroit, Michigan (applying Michigan law) in accordance with the
National Rules for the Resolution of Employment Disputes of the
American Arbitration Association then in effect. The decision of the
arbitrator will be final and binding upon the parties hereto.
Judgment maybe entered on the arbitrator’s award in any court
having jurisdiction. The parties acknowledge and agree that in
connection with any such arbitration and regardless of outcome
(a) each party shall pay all its own costs and expenses,
including without limitation its own legal fees and expenses, and
(b) joint expenses shall be borne equally among the parties.

21. INDEMNIFICATION.
The
Company hereby agrees to indemnify the Executive and hold him
harmless to the extent provided under the by-laws of the Company
against and in respect to any and all actions, suits, proceedings,
claims, demands, judgments, costs, expenses (including reasonable
attorney’s fees), losses, and damages resulting from the
Executive’s good faith performance of his duties and
obligations with the Company. This obligation shall survive the
termination of the Executive’s employment with the Company.

22. LIABILITY
INSURANCE. The
Company shall cover the Executive under directors and officers
liability insurance both during and, while potential liability
exists, after the term of this Agreement in the same amount and to
the same extent as the Company covers its other officers and
directors.

23. MISCELLANEOUS.
No
provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing
and signed by the Executive and such officer or director as may be
designated by the Board. No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent
time. This Agreement together with all exhibits hereto sets forth the
entire agreement of the parties hereto in respect of the subject
matter contained herein. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of
the State of Michigan without regard to its conflicts of law
principles.

24. NO
MITIGATION. In
no event shall the Executive be obliged to seek other employment or
take any other action by way of mitigation of the amounts payable to
the Executive under any of the provisions of this Agreement, nor
shall the amount of any payment hereunder be reduced by any
compensation earned by the Executive as a result of employment by
another employer, except as provided in Section 14(b) hereof.

10

25. REPRESENTATIONS.
The
Executive represents and warrants to the Company that he has the
legal right to enter into this Agreement and to perform all of the
obligations on his part to be performed hereunder in accordance with
its terms and that he is not a party to any agreement or
understanding, written or oral, which could prevent him form entering
into this Agreement or performing all of his obligations hereunder.

26. WITHHOLDING.
The
Company may withhold from any and all amounts payable under this
Agreement such federal, state and local taxes as may be required to
be withheld pursuant to any applicable law or regulation.

27. APPLICATION
OF SECTION 409A.

(a)
COMPLIANCE.
The parties hereby agree that the provisions of this Agreement shall
be interpreted to comply with, or be exempt from, Section 409A,
and all provisions of this Agreement shall be construed in a manner
consistent with the requirements for avoiding taxes or penalties
under Section 409A. If any provision of this Agreement (or of
any award of compensation) would cause the Executive to incur any
additional tax or interest under Section 409A and modifying it
would avoid such additional tax, the Company shall, upon the
Executive’s specific written request, use its reasonable
business efforts to in good faith reform such provision to comply
with Section 409A; provided that the Company and the Executive agree
to maintain, to the maximum extent practicable, the original intent
and economic benefit to the Executive and the Company of the
applicable provision without violating the provisions of
Section 409A.

(b)
SEPARATION
FROM SERVICE. A
termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment
of any amounts or benefits upon or following a termination of
employment unless such termination is also a “separation from
service” within the meaning of Section 409A and, for
purposes of any such provision of this Agreement, references to a
“resignation,” “termination,” “terminate,”
“termination of employment” or like terms shall mean
separation from service.

(c)
INSTALLMENTS
TREATED AS SEPARATE PAYMENTS. If
under this Agreement, an amount is to be paid in two or more
installments, for purposes of Section 409A, each installment
shall be treated as a separate payment.

(d)
DISCRETION
OF COMPANY TO PAY WITHIN NUMBER OF DAYS.
Whenever a payment under this Agreement specifies a payment period
with reference to a number of days (e.g., “payment shall be
made within 30 days following the Effective Date”), the
actual date of payment within the specified period shall be within
the sole discretion of the Company.

(e)
REIMBURSEMENTS.
Reimbursements of expenses payable to the Executive under this
Agreement shall be paid no later than the last day of the calendar
year following the calendar year in which the expenses to be
reimbursed are incurred. With regard to such reimbursements or any
in-kind benefits under this Agreement, except as permitted by

11

Section 409A,
(i) the right to reimbursement or in-kind benefits shall not be
subject to liquidation or exchange for another benefit, and (ii) the
amount of expenses eligible for reimbursement, or in-kind benefits,
provided during any taxable year shall not affect the expenses
eligible for reimbursement, or in-kind benefits to be provided, in
any other taxable year, provided that the foregoing clause (ii) shall
not be violated with regard to expenses reimbursed under any
arrangement covered by Code Section 105(b) solely because such
expenses are subject to a limit related to the period the arrangement
is in effect.

28. IN
WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first
written above.

CHAMPION ENTERPRISES, INC.

By:

Name: Selwyn Isakow

Its: Lead Independent Director

WILLIAM C. GRIFFITHS

12

EXHIBIT
A

Golden
Parachute Provision

(a) In
the event that the Executive shall become entitled to payments and/or
benefits provided by this Agreement or any other amounts in the
“nature of compensation” (whether pursuant to the terms
of this Agreement or any other plan, arrangement or agreement with
the Company, any person whose actions result in a change of ownership
or effective control covered by Section 280G(b)(2) of the Code
or any person affiliated with the Company or such person) as a result
of such change in ownership or effective control (collectively the
“Company Payments”), and such Company Payments will be
subject to the tax (the “Excise Tax”) imposed by
Section 4999 of the Code (and any similar tax that may hereafter
be imposed by any taxing authority) the Company shall pay to the
Executive an additional amount (the “Gross-Up Payment”)
such that the net amount retained by the Executive, after deduction
of any Excise Tax on the Company Payments and any U.S. federal,
state, and for local income or payroll tax upon the Gross-up Payment
provided for by this paragraph (a), but before deduction for any U.S.
federal, state, and local income or payroll tax on the Company
Payments, shall be equal to the Company Payments. Any Gross-Up
Payments hereunder shall be remitted, within the time specified, to
the Executive but not later than the end of the calendar year
following the calendar year in which the Executive remits the related
taxes to the appropriate government authority.

Notwithstanding
the foregoing, if it shall be determined that the Executive is
entitled to a Gross-Up Payment, but that if the Company Payments
(other than that portion valued under Treasury
Regulation Section 1.280G, Q&A 24(c)) (the “Cash
Payments”) are reduced by the amount necessary such that the
receipt of the Company Payments would not give rise to any Excise Tax
(the “Reduced Payment”) and the Reduced Payment would not
be less than 92.5% of the Cash Payment, then no Gross-Up Payment
shall be made to the Executive and the Cash Payments, in the
aggregate, shall be reduced to the Reduced Payment. If the Reduced
Payment is to be effective, payments shall be reduced in the
following order (1) acceleration of vesting of any stock options
for which the exercise price exceeds the then fair market value,
(2) any cash severance based on a multiple of Base Salary or
Bonus, (3) any other cash amounts payable to the Executive,
(4) any benefits valued as parachute payments; and
(5) acceleration of vesting of any equity not covered by
(1) above.

In
the event that the Internal Revenue Service or court ultimately makes
a determination that the excess parachute payments plus the base
amount is an amount other than as determined initially, an
appropriate adjustment shall be made with regard to the Gross-Up
Payment or Reduced Payment, as applicable to reflect the final
determination and the resulting impact on whether the preceding
paragraph applies.

(b) For
purposes of determining whether any of the Company Payments and
Gross-up Payments (collectively the “Total Payments”)
will be subject to the Excise Tax and the amount of such Excise Tax,
(x) the Total Payments shall be treated as “parachute
payments” within the meaning of Section 280G(b)(2) of the Code,
and all “parachute payments” in excess of the “base
amount” (as defined under Section 280G(b)(3) of the Code)
shall be treated as subject to the Excise Tax, unless and except to
the extent that, in the determination of the Company’s
independent certified public accountants or tax counsel selected by
such accountants or the

1

Company
(the “Accountants”) such Total Payments (in whole or in
part) either do not constitute “parachute payments,”
including giving effect to the recalculation of stock options in
accordance with Treasury Regulation Section 1.280G-1, Q&A
33, represent reasonable compensation for services actually rendered
within the meaning of Section 280G(b)(4) of the Code in excess
of the “base amount” or are otherwise not subject to the
Excise Tax, and (y) the value of any non-cash benefits or any
deferred payment or benefit shall be determined by the Accountants in
accordance with the principles of Section 280G of the Code. To
the extent permitted under Revenue Procedure 2003-68 or other
applicable rules, the value determination shall be recalculated to
the extent it would be beneficial to the Company. The determination
of the Accountants shall be final and binding upon the Company and
the Executive, except to the extent provided herein with regard to
Internal Revenue Service determinations. The Company shall be
responsible for all charges of the Accountants.

(c) In
the event that the Excise Tax is subsequently determined by the
Accountants to be less than the amount taken into account hereunder
at the time the Gross-up Payment is made, the Executive shall repay
to the Company, at the time that the amount of such reduction in
Excise Tax is finally determined, the portion of the prior Gross-up
Payment attributable to such reduction (plus the portion of the
Gross-up Payment attributable to the Excise Tax and U.S. federal,
state and local income tax imposed on the portion of the Gross-up
Payment being repaid by the Executive if such repayment results in a
reduction in Excise Tax or a U.S. federal, state and local income tax
deduction), plus interest on the amount of such repayment at the rate
provided in Section 1274(b)(2)(B) of the Code. The Company shall be
responsible for all charges of the Accountant.

In
the event that the Excise Tax is later determined by the Accountant
or the Internal Revenue Service to exceed the amount taken into
account hereunder at the time the Gross-up Payment is made (including
by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-up Payment), the Company shall
make an additional Gross-up Payment in respect of such excess (plus
any interest or penalties payable with respect to such excess) at the
time that the amount of such excess is finally determined.

(d) The
Gross-up Payment or portion thereof provided for in subsection
(c) above shall be paid not later than the 30th day following an
event occurring which subjects the Executive to the Excise Tax;
provided, however, that if the amount of such Gross-up Payment or
portion thereof cannot be finally determined on or before such day,
the Company shall pay to the Executive on such day an estimate, as
determined in good faith by the Accountant, of the minimum amount of
such payments and shall pay the remainder of such payments (together
with interest at the rate provided in Section 1274(b)(2)(B) of the
Code), subject to further payments pursuant to subsection (c) hereof,
as soon as the amount thereof can reasonably be determined, but in no
event later than the 90th day after the occurrence of the event
subjecting the Executive to the Excise Tax. In the event that the
amount of the estimated payments exceeds the amount subsequently
determined to have been due, such excess shall constitute a loan by
the Company to the Executive, payable on the fifth day after demand
by the Company (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code).

(e) In
the event of any controversy with the Internal Revenue Service (or
other taxing authority) with regard to the Excise Tax, the Executive
shall permit the Company to control

2

issues
related to the Excise Tax (at its expense). In the event of any
conference with any taxing authority as to the Excise Tax or
associated income taxes, the Executive shall permit the
representative of the Company to accompany the Executive, and the
Executive and the Executive’s representative shall cooperate
with the Company and its representative.

(f) The
Executive shall promptly deliver to the Company copies of any written
communications, and summaries of any verbal communications, with any
taxing authority regarding the Excise Tax covered by this provision.

(g) Nothing
in this Section is intended to violate the Sarbanes-Oxley Act and to
the extent that any advance or repayment obligation hereunder would
do so, such obligation shall be modified so as to make the advance a
nonrefundable payment to the Executive and the repayment obligation
null and void to the extent required by such Act.

3

Exhibit 99.2

CHANGE IN
CONTROL AGREEMENTAs Amended And Restated

This Change in Control
Agreement as amended and restated (the “Agreement”) is
entered into as of the 17thday of December, 2008, by and between Champion
Enterprises, Inc., a Michigan corporation, with its principal office
at 755 West Big Beaver Road, Suite 1000, Troy, Michigan 48084
(the “Company”) and William C. Griffiths (the
“Executive”).

WITNESSETH

WHEREAS,
the Company believes that the establishment and maintenance of sound
and vital management of the Company is essential to the protection
and enhancement of the interests of the Company and the stockholders
of the Company;

WHEREAS,
the Company also recognizes that the possibility of a Change in
Control (as defined herein), with the attendant uncertainties and
risks, might result in the departure or distraction of key employees
of the Company to the detriment of the Company;

WHEREAS,
the Board has determined that it is appropriate to take steps to
induce key employees to remain with the Company, and to reinforce and
encourage their continued attention and dedication, when faced with
the possibility of a Change in Control of the Company;

WHEREAS,
the Company and the Executive amend and restate the Change in Control
Agreement, dated as of November 22, 2004, in order to comply
with Code Section 409A.

NOW, THEREFORE,
in consideration of the premises and mutual covenants herein
contained and of other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

1. DEFINITIONS.

(a) “Base
Salary” means the Executive’s annual base compensation
rate for services paid by the Company to the Executive at the time
immediately prior to the Executive’s termination of employment,
as reflected in the Company’s payroll records or, if higher,
the Executive’s annual base compensation rate immediately prior
to a Change in Control. Base Salary shall not include commissions,
bonuses, overtime pay, incentive compensation, benefits paid under
any qualified plan, any group medical, dental or other welfare
benefit plan, noncash compensation or any other additional
compensation but shall include amounts reduced pursuant to the
Executive’s salary reduction agreement under Code Sections 125,
132(f)(4) or 401(k), if any, or a nonqualified elective deferred
compensation arrangement, if any, to the extent that in each such
case the reduction is to base salary.

(b) “Board”
means the board of directors of the Company.

(c) “Bonus”
means the Executive’s Target Bonus (as defined in the
Employment Agreement) for the fiscal year in which the Executive’s
termination of employment occurs or, if higher, the Executive’s
Target Bonus for the fiscal year in which a Change in Control occurs.

(d) “Cause”
means (i) the Executive’s conviction of, or pleading
guilty or nolocontendere to, a crime
by the Executive which constitutes (x) a felony (other than a
traffic related offense) or (y) a misdemeanor involving moral
turpitude and which, in the case of (y), may reasonably be expected
to have a material adverse effect on the Company, its business,
reputation or interests; (ii) Executive’s material breach
of his Employment Agreement or any other contract or agreement
between the Executive and the Company, which breach, if curable, is
not cured within 20 days of the giving of written notice thereof
to the Executive; (iii) the Executive’s material violation
of the Company’s code of conduct, code of ethics or any other
written policy or a material breach by the Executive of a fiduciary
duty or responsibility to the Company, which may reasonably be
expected to have a material adverse effect on the Company, its
business, reputation or interests; (iv) the willful misconduct
or gross negligence of the Executive with regard to the Company or in
the performance of his duties that is materially injurious to the
Company; or (v) the willful and continued failure of the
Executive to attempt to perform the Executive’s duties with the
Company (other than for any such failure resulting from the
Executive’s incapacity due to physical or mental illness) after
written notice of such failure has been give to the Executive. A
termination for Cause after a Change in Control shall be based only
on events occurring after such Change in Control; provided, however,
the foregoing limitation shall not apply to an event constituting
Cause which was not discovered by the Company prior to a Change in
Control.

Notwithstanding the
foregoing, the Executive shall not be deemed to have been terminated
for Cause without (i) advance written notice provided to the
Executive not less than 14 days prior to the Date of Termination
(as defined in Section 6 below) setting forth the Company’s
intention to consider terminating the Executive including a statement
of the Date of Termination and the specific detailed basis for such
consideration for Cause; (ii) an opportunity of the Executive,
together with his counsel, to be heard before the Board during the
14 day period ending on the Date of Termination; (iii) a
duly adopted resolution of the Board stating that in accordance with
the provisions of the next to the last sentence of this Section 1(d),
that the actions of the Executive constituted Cause and the basis
thereof; and (iv) a written determination provided by the Board
setting forth the acts and omissions that form the basis of such
termination of employment. Any determination by the Board hereunder
shall be made by the affirmative vote of at least a two-thirds
majority of the members of the Board (other than the Executive). Any
purported termination of employment of the Executive by the Company
which does not meet each and every substantive and procedural
requirement of this Section 1(d) shall be treated for all purposes
under this Agreement as a termination of employment without Cause.

(e) “Change
in Control” means the occurrence of any of the following:

(i) any “person”
(as defined in Section 13(d) and 14(d) of the Exchange Act),
excluding for this purpose, the Company or any subsidiary of the
Company, or any employee benefit plan of the Company or any
subsidiary of the Company, or any person or entity organized,
appointed or established by the Company for or pursuant to the terms
of any such plan which acquires beneficial

ownership of voting securities of the Company, is or
becomes the beneficial owner, directly or indirectly of securities of
the Company representing 35% or more of the combined voting power of
the Company’s then outstanding securities; provided, however,
that no Change in Control will be deemed to have occurred (x) as
a result of a change in ownership percentage resulting solely from an
acquisition of securities by the Company or (y) if a person
inadvertently acquires an ownership interest in 35% or more but then
promptly reduces that ownership interest below 35%; and provided,
further, that in determining any person’s percentage of
ownership, any securities acquired directly from the Company (other
than through splits or dividends) shall not be taken into account
unless such acquisition will result in a person becoming the
beneficial owner, directly or indirectly of securities of the Company
representing 50% or more of the combined voting power of the
Company’s then outstanding securities or the Board determines
to take such securities into account;

(ii) during any two
consecutive years (not including any period beginning prior to the
Effective Date), individuals who at the beginning of such two-year
period constitute the Board and any new director (except for a
director designated by a person who has entered into an agreement
with the Company to effect a transaction described elsewhere in this
definition of Change in Control) whose election by the Board or
nomination for election by the Company’s stockholders was
approved by a vote of at least two-thirds of the directors then still
in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved
(such individuals and any such new director, an “Incumbent
Director” and, collectively, the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board;
provided, however, that any such person whose initial assumption of
office is in connection with an actual or threatened election contest
relating to the election of members of the Board or other actual or
threatened solicitation of proxies or consents by or on behalf of a
“person” (as defined in Section 13(d) and 14(d) of the
Exchange Act) other than the Board, including by reason of agreement
intended to avoid or settle any such actual or threatened contest or
solicitation, shall not be considered an Incumbent Director;

(iii) consummation of a
reorganization, merger or consolidation or sale or other disposition
of all or substantially all of the assets of the Company (a “Business
Combination”), in each case, unless, following such Business
Combination, (x) all or substantially all of the individuals and
entities who were the beneficial owners of outstanding voting
securities of the Company immediately prior to such Business
Combination beneficially own, by reason of such ownership of the
Company’s voting securities immediately before the Business
Combination, directly or indirectly, more than 50% of the combined
voting power of the then outstanding voting securities entitled to
vote generally in the election of directors of the company resulting
from such Business Combination (including, without limitation, a
company which as a result of such transaction owns the Company or all
or substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same

proportions as their ownership, immediately prior to
such Business Combination of the outstanding voting securities of the
Company; (y) no person (excluding any company resulting from
such Business Combination or any employee benefit plan (or related
trust) of the Company or such company resulting from such Business
Combination) beneficially owns, directly or indirectly, 35% or more
of, respectively, the then combined voting power of the then
outstanding voting securities of such company except to the extent
that such ownership existed prior to the Business Combination; and
(z) at least a majority of the members of the board of directors
of the company resulting from such Business Combination were members
of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination;

(iv) the shareholders
of the Company approve a complete liquidation or dissolution of the
Company; or

(v) any other event
that the Board, in its sole discretion, shall determine constitutes a
Change in Control.

(n) “409A
Change in Control” means a Change in Control that is also (i) a
“change in the ownership” of the Company, (ii) a
“change in the effective control” of the Company or
(iii) a “change in the ownership of a substantial portion
of the assets” of the Company, each as defined in Treasury
Regulation Section 1.409A-3(i)(5)(v)-(vii).

(o) “Good
Reason” means the occurrence of any of the following events,
without the express written consent of the Executive, unless such
events are fully corrected in all material

respectsby the Company within
30 days following written notification by the Executive to the
Company that he intends to terminate his employment under the
Employment Agreement for one of the reasons set forth below:

(i) (x) any
reduction or diminution (except temporarily during any period of
physical or mental incapacity) in the Executive’s titles,
(y) any material reduction or diminution in the Executive’s
authorities, duties or responsibilities or reporting requirements
with the Company from that which exists immediately prior to a Change
in Control (except in each case in connection with the termination of
the Executive’s employment for Cause or as a result of the
Executive’s death, or temporarily as a result of the
Executive’s illness or other absence), including but not
limited to, if the Executive is on the Board at the time of a Change
in Control, a failure to elect the Executive to the Board or removal
of the Executive from the Board, except if such removal is necessary
as a result of legal or regulatory requirements, or (z) the
assignment to the Executive of duties and responsibilities materially
inconsistent with the position held by the Executive immediately
prior to a Change in Control, excluding in the case of (y) or
(z) an isolated, insubstantial and inadvertent action not taken
in bad faith and which is remedied promptly after receipt of notice
thereof given by the Executive;

(ii) a material breach
by the Company of any provisions of the Employment Agreement,
including, but not limited to, any reduction in any part of the
Executive’s Base Salary;

(iii) the failure of
the Company to obtain and deliver to the Executive a satisfactory
written agreement from any successor to the Company to assume and
agree to perform this Agreement;

(iv) the Executive is
required to relocate to a principal place of employment more than 60
miles from his principal place of employment with the Company;

(v) a failure by the
Company after a Change in Control to continue any annual bonus plan,
program or arrangement in which the Executive is then entitled to
participate (the “Bonus Plans”), provided that any such
plan(s) may be modified at the Company’s discretion from time
to time but shall be deemed terminated if (A) any such plan does
not remain substantially in the form in effect prior to such
modification and (B) plans providing the Executive with
substantially similar benefits are not substituted therefore
(“Substitute Plans”), or a failure by the Company to
continue the Executive as a participant in the Bonus Plans and
Substitute Plans on at least the same basis as to the potential
amount of the bonus and the achievability thereof as the Executive
participated immediately prior to any change in such plans or awards,
in accordance with the Bonus Plans and the Substitute Plans, provided
that such action is not cured within 10 days after written
notice thereof from the Executive to the Company;

(vi) a failure to
permit the Executive after the Change in Control to participate in
cash or equity based incentive plans and programs (other than Bonus
Plans) on a basis providing the Executive in the aggregate with an
annualized award value in each fiscal year after the Change in
Control at least equal to the aggregate annualized award value being
provided by the Company to the Executive under such incentive plans
and programs immediately prior to the Change in Control (with any
awards intended not to be repeated on an annual basis allocated over
the years the awards are intended to cover), provided that such
action is not cured within 10 days after written notice thereof
from the Executive to the Company; or

(vii) the failure by
the Company to continue to provide Executive with benefits
substantially similar to those enjoyed by Executive under any of the
Company’s life insurance, medical, dental, accident, disability
or pension plans or perquisites in which the Executive was
participating at the time of the Change in Control, the taking of any
action by the Company which would directly or indirectly materially
reduce any of such benefits, or the failure by the Company to provide
Executive with the number of paid vacation days to which he is
entitled on the basis of years of service with the Company in
accordance with the Company’s normal vacation policy in effect
at the time of the Change in Control.

Good Reason will cease
to exist for an event on the 90th day following its occurrence,
unless the Executive has given the Company written notice thereof
prior to such date.

(p) “Notice
of Termination” and “Date of Termination have the meaning
ascribed to them in Sections 5 and 6.

(q) “Term”
has the meaning ascribed to it in Section 2 hereof.

2. TERM.
The term of this Agreement shall commence on
the Effective Date and end on the earliest of (a) the
termination of the Executive’s employment with the Company (or,
if a Change in Control occurs within 180 days after such
termination, the date of the Change in Control) or (b) the end of a
one year extension of the Agreement (which is generally on an
anniversary of the Effective Time), unless the Term has been
automatically extended for successive additional one year periods.
Automatic extensions of the Term shall occur unless, at least
18 months prior to the end of the Term, the Company has notified
the Executive in writing that the Term shall not be extended, and
further provided, that, if a Change in Control occurs prior to the
end of the aforesaid period, the duration of this Agreement shall be
extended, if it would otherwise end prior thereto, until the second
anniversary of the date of such Change in Control, whether such
two-year period ends before or after the end of such aforesaid
period; provided, however, that in no event shall the Term extend
beyond the end of the month in which the Executive’s 65th
birthday occurs. Notwithstanding anything in this Agreement to the
contrary, if the Company becomes obligated to make any payment to the
Executive pursuant to the terms hereof, then this Agreement shall
remain in effect for such purposes until all of the Company’s
obligations hereunder are fulfilled and the provisions of Exhibit A
shall remain in effect indefinitely.

3. TERMINATION
IN CONNECTION WITH CHANGE IN CONTROL.
If a Change in Control occurs during the Term
and the Executive’s employment by the Company is terminated,
subject to Section 23(b) below, (a) by the Company without Cause
or by the Executive for Good Reason at any time during the period
commencing on the date of the Change in Control and ending on the
second anniversary of the Change in Control or (b) by the
Company without Cause or by the Executive for Good Reason (without
reference to the Change in Control measurement date) at any time
during the period commencing 180 days prior to a Change in
Control and ending immediately prior to the Change in Control (but
only if the Change in Control actually occurs), and the Executive
demonstrates that such termination was requested by the party taking
control or was otherwise in anticipation of the Change in Control,
then the Company shall pay or provide the Executive with the payments
and benefits provided under Section 4 hereof.

4. COMPENSATION
UPON TERMINATION. Subject
to Section 8, in the event that the Executive becomes entitled
to payments or benefits pursuant to Section 3, then the Company
shall pay or provide the Executive with the following payments and
benefits in lieu of any other termination, change in control,
separation, severance or similar benefits under the Employment
Agreement or under any other compensation arrangement with the
Employer. The amounts hereunder shall reduce and be in full
satisfaction of any statutory entitlement (including notice of
termination, termination pay and/or severance pay) of the Executive
upon a termination of employment.

(a) Subject to a
potential delayed commencement pursuant to Sections 4(d) below, and
subject to Section 23(e) below, the Company shall pay to the
Executive: (i) any unpaid Base Salary the date it would have
been paid had Executive continue employment; (ii) any Bonus
earned but unpaid with respect to the fiscal year ending on or
preceding the Date of Termination on the date it would have been paid
if the Executive continued employment; (iii) reimbursement for
any unreimbursed expenses incurred through the Date of Termination,
which shall be made in no event later than the end of the calendar
year following the calendar year in which the expenses are incurred;
(iv) a pro-rata portion of the Executive’s bonus for the
fiscal year in which the Date of Termination occurs based on results
for the plan year (determined by multiplying the amount of such bonus
which would be due for the full fiscal year by a fraction, the
numerator of which is the number of days during the fiscal year of
termination that the Executive is employed by the Company and the
denominator of which is 365), payable when it would have been paid if
the Executive continued employment; (v) any accrued but unused
vacation time in accordance with Company policy; and (vi) any
benefits or rights to equity interests in accordance with applicable
plans and grants (other than severance arrangements) (collectively,
items (i) through (vi) shall be hereafter referred to as
“Accrued Benefits”).

(b) Subject to a
potential delayed commencement pursuant to Section 4(d) below, and at
the time period specified in Section 9 (regarding release of
claims), a lump sum cash payment equal to two times the sum of the
Executive’s Base Salary and Bonus is made, with the multiple of
Base Salary paid as provided in Section 9 and the multiple of
Bonus subject to Section 9 but paid six months and one day after
the termination of employment; provided, however, that if a Change in
Control occurs and such Change in Control is not a 409A Change in
Control, or the termination occurs prior to the Change in Control and
is covered by Section 3 hereof, then the

twotimes Base Salary in the
above clause shall be paid in 24 equal monthly installments (based on
the Date of Termination and Section 9) and the two times Bonus
shall be paid in a lump sum.

(c) Subject
Section 4(d) and Section 9, with respect to all health plans
covering the Executive, including medical, dental and prescription
drug coverage if the Executive pays the applicable COBRA premium for
the Executive and dependents, then for a period extending to the
earliest of (i) the expiration of the COBRA period, (ii) two
years after the Date of Termination, or (iii) if the Executive
becomes eligible under the medical plan of a future employer, the
Company shall pay the Executive an amount equal to such premiums less
the amount of co-payment required for other senior executives for
such period (subject to the delayed payment requirements for the
first six months pursuant to Section 4(d), and amounts for such
first six months payable in lump sum six months and one day after the
termination).

(d) If the
Executive is deemed on the Date of Termination to be a “specified
employee” within the meaning of Code Section 409A(a)(2)(B),
then with regard to any payment or the provision of any benefit
(whether under this Section 4, pursuant to other provisions of
this Agreement or otherwise) that is considered deferred compensation
under Code Section 409A payable on account of a “separation
from service,” such payment shall not be paid (or commence)
earlier than the date that is six months following the termination of
employment or the Executive’s earlier death. Upon the
expiration of the six month period or on the Executive’s
earlier death, all payments and benefits delayed pursuant to this
Section 4(d) (whether they would have otherwise been payable in a
single sum or in installments in the absence of such delay) shall be
paid or reimbursed to the Employee in a lump sum, and any remaining
payments and benefits due under this Agreement shall be paid or
provided in accordance with the normal payment dates specified for
them herein.

5. NOTICE
OF TERMINATION. After
a Change in Control, any purported termination of the Executive’s
employment pursuant to Section 3 shall be communicated by
written Notice of Termination from one party hereto to the other
party hereto in accordance with Section 11. For purposes of this
Agreement, a “Notice of Termination” shall mean a notice
which shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive’s employment.

6. DATE
OF TERMINATION. “Date
of Termination”, with respect to any purported termination of
the Executive’s employment after a Change in Control, shall
mean the date specified in the Notice of Termination (which, in the
case of a termination by the Executive for Good Reason, shall not be
less than five days nor more than 60 days, from the date such
Notice of Termination is given). In the event of Notice of
Termination by the Company, the Executive may treat such notice as
having a Date of Termination at any date between the date of the
receipt of such notice and the Date of Termination indicated in the
Notice of Termination by the Company; provided, that the Executive
must give the Company written notice of the Date of Termination if
the Executive deems it to have occurred prior to the Date of
Termination indicated in the notice.

7. EXCISE
TAX. In the
event that the Executive becomes entitled to payments and/or benefits
which would constitute “parachute payments” within the
meaning of CodeSection
280G(b)(2), the provisions of Exhibit A shall apply.

8. RESTRICTIVE
COVENANTS. The
Executive acknowledges that the restrictive covenants contained in
Sections 12, 13 and 14 of the Employment Agreement or in any
other agreement with the Company previously signed by the Executive
shall not be affected by this Agreement and such Sections or
restrictive covenants in any such agreement shall continue to apply
after a Change in Control or a termination of employment after a
Change in Control (even if the employment term under the Employment
Agreement ended prior thereto).

9. RELEASE
REQUIRED. Any
amounts payable and benefits or additional rights provided pursuant
to this Agreement beyond Accrued Benefits shall be contingent on the
Executive executing and not revoking within the revocation period,
within 60 days following the effective Date of Termination, a
general release of all claims by the Executive against the Company
and its affiliates substantially in the form attached hereto as
Exhibit B, and all amounts other than Accrued Benefits shall be
paid on the 60th day following the Executive’s Date of
Termination.

10. NO
ASSIGNMENTS.

(a) This Agreement
is personal to each of the parties hereto. Except as provided in
Section 10(b) below, no party may assign or delegate any rights or
obligations hereunder without first obtaining the written consent of
the other party hereto.

(b) The Company
may assign this Agreement to any successor to all or substantially
all of the business and/or assets of the Company provided the Company
shall require such successor to expressly assume in writing and agree
to perform this Agreement (but without creating any rights on a
second change in control), in the same manner and to the same extent
that the Company would be required to perform it if no such
succession had taken place.

11. NOTICE.
For the purpose of this Agreement, notices
and all other communications provided for in this Agreement shall be
in writing and shall be deemed to have been duly given (i) on the
date of delivery if delivered by hand, (ii) on the date of
transmission, if delivered by confirmed facsimile, (iii) on the
first business day following the date of deposit if delivered by
guaranteed overnight delivery service, or (iv) on the fourth
business day following the date delivered or mailed by United States
registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:

If to the Executive:

At the address (or to the facsimile number) then
shownon the records of the Company

orto such other address as
either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective
only upon receipt.

12. SECTION
HEADINGS; INCONSISTENCY. The
section headings used in this Agreement are included solely for
convenience and shall not affect, or be used in connection with, the
interpretation of this Agreement. In the event of any inconsistency
between the terms of this Agreement and any form, award, plan or
policy of the Company, the terms of this Agreement shall control.

13. SEVERABILITY.
The provisions of this Agreement shall be
deemed severable and the invalidity of unenforceability of any
provision shall not affect the validity or enforceability of the
other provisions hereof.

14. COUNTERPARTS.
This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same instruments.

15. ARBITRATION.
Any dispute or controversy arising under or
in connection with this Agreement or the Executive’s employment
with the Company, other than injunctive relief under any restrictive
covenant agreement or provision, shall be settled exclusively by
arbitration, conducted before a single arbitrator in Detroit,
Michigan (applying Michigan law) in accordance with the National
Rules for the Resolution of Employment Disputes of the American
Arbitration Association then in effect. The decision of the
arbitrator will be final and binding upon the parties hereto.
Judgment may be entered on the arbitrator’s award in any court
having jurisdiction. The parties acknowledge and agree that in
connection with any such arbitration and regardless of outcome (a)
each party shall pay all its own costs and expenses, including
without limitation its own legal fees and expenses, and (b) joint
expenses shall be borne equally among the parties.

16. INDEMNIFICATION.
The Company hereby agrees to indemnify the
Executive and hold him harmless to the extent provided under the
by-laws of the Company against and in respect to any and all actions,
suits, proceedings, claims, demands, judgments, costs, expenses
(including reasonable attorney’s fees), losses, and damages
resulting from the Executive’s good faith performance of his
duties and obligations with the Company. This obligation shall
survive the termination of the Executive’s employment with the
Company.

17. LIABILITY
INSURANCE. The
Company shall cover the Executive under directors and officers
liability insurance both during and, while potential liability
exists, after the term of this Agreement in the same amount and to
the same extent as the Company covers its other officers and
directors. This obligation shall survive the termination of the
Executive’s employment with the Company.

18. LEGAL
FEES. In the
event that a claim for payment or benefits under this Agreement is
disputed or the Executive is otherwise enforcing rights under this
Agreement and the arbitrator determines that the Executive has
prevailed on the material issues in the arbitration, the Company
shall promptly pay, or reimburse the Executive, for all reasonable
legal and other

professionalfees, costs of
arbitration and other expenses incurred in connection therewith by
the Executive in such amount as determined by the arbitrator in his
or her award. Any reimbursement of such fees shall occur within
60 days of the issuing of the award.

19. MISCELLANEOUS.
No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the Executive and
such officer or director as may be designated by the Board; provided,
however, that the Company may amend this Agreement at any time,
retroactively or otherwise, without the consent of the Executive, as
may be necessary to preserve the intended tax characteristics of this
Agreement, including, without limitation, such amendments necessary
to address the requirements of Code Section 409A. No waiver by
either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same
or at any prior or subsequent time. This Agreement together with all
exhibits hereto sets forth the entire agreement of the parties hereto
in respect of the subject matter contained herein and supersedes all
existing agreements between them concerning such subject matter
(including, without limitation, the Employment Agreement as it may
apply with regard to a termination after a Change in Control or with
regard to a termination in anticipation of a Change in Control but
not any stock option or other equity agreement nor any plan or
programs, except as provided herein). No agreements or
representations, oral or otherwise, express or implied, with respect
to the subject matter hereof have been made by either party which are
not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall
be governed by the laws of the State of Michigan without regard to
its conflicts of law principles.

20. NO
MITIGATION: NO OFFSET.
In no event shall the Executive be obliged to seek other employment
or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement, nor
shall the amount of any payment hereunder be reduced by any
compensation earned by the Executive as a result of employment by
another employer, except as provided in Section 4(c) hereof. The
amounts payable to the Executive hereunder shall not be subject to
set-off, counterclaim, recoupment, defense or other right which the
Company may have against the Executive.

21. WITHHOLDING.
The Company may withhold from any and all
amounts payable under this Agreement such federal, state and local
taxes as may be required to be withheld pursuant to any applicable
law or regulation.

22. NOT
AN AGREEMENT OF EMPLOYMENT. This
is not an agreement assuring employment and the Company reserves the
right to terminate the Executive’s employment at any time with
or without Cause, subject to the payment provisions hereof if such
termination is after, or within 180 days prior to, a Change in
Control. The Executive acknowledges that the Executive is aware that
the Executive shall have no claim against the Company hereunder or
for deprivation of the right to receive the amounts hereunder as a
result of any termination that does not specifically satisfy the
requirements hereof or as a result of any other action taken by the
Company. Except as expressly provided herein, the foregoing shall not
affect the Executive’s rights under any other agreement with
the Company.

23. APPLICATION
OF SECTION 409A

(a)
COMPLIANCE. The
parties hereby agree that the provisions of this Agreement shall be
interpreted to comply with, or be exempt from, Code Section 409A,
and all provisions of this Agreement shall be construed in a manner
consistent with the requirements for avoiding taxes or penalties
under Code Section 409A. If any provision of this Agreement (or
of any award of compensation) would cause the Executive to incur any
additional tax or interest under Code Section 409A and modifying it
would avoid such additional tax, the Company shall, upon the
Executive’s specific written request, use its reasonable
business efforts to in good faith reform such provision to comply
with Code Section 409A; provided that the Company and the
Executive agree to maintain, to the maximum extent practicable, the
original intent and economic benefit to the Executive and the Company
of the applicable provision without violating the provisions of Code
Section 409A.

(b)
SEPARATION FROM SERVICE. A
termination of employment shall not be deemed to have occurred for
purposes of any provision of this Agreement providing for the payment
of any amounts or benefits upon or following a termination of
employment unless such termination is also a “separation from
service” within the meaning of Code Section 409A and, for
purposes of any such provision of this Agreement, references to a
“resignation,” “termination,” “terminate,”
“termination of employment” or like terms shall mean
separation from service.

(c)
INSTALLMENTS TREATED AS SEPARATE PAYMENTS. If
under this Agreement, an amount is to be paid in two or more
installments, for purposes of Code Section 409A, each
installment shall be treated as a separate payment.

(d)
DISCRETION OF COMPANY TO PAY WITHIN NUMBER OF
DAYS. Whenever a payment under this Agreement
specifies a payment period with reference to a number of days (e.g.,
“payment shall be made within 30 days following the
Effective Date”), the actual date of payment within the
specified period shall be within the sole discretion of the Company.

(e)
REIMBURSEMENTS.
Reimbursements of expenses payable to the Executive under this
Agreement shall be paid no later than the last day of the calendar
year following the calendar year in which the expenses to be
reimbursed are incurred. With regard to such reimbursements or any
in-kind benefits under this Agreement, except as permitted by Code
Section 409A, (i) the right to reimbursement or in-kind
benefits shall not be subject to liquidation or exchange for another
benefit, and (ii) the amount of expenses eligible for
reimbursement, or in-kind benefits, provided during any taxable year
shall not affect the expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other taxable year, provided that the
foregoing clause (ii) shall not be violated with regard to
expenses reimbursed under any arrangement covered by Code Section
105(b) solely because such expenses are subject to a limit related to
the period the arrangement is in effect.

IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the date first
written above.

CHAMPION
ENTERPRISES, INC.

By:

Name:

Selwyn Isakow

Its:

Lead
Independent Director

WILLIAM C.
GRIFFITHS

EXHIBIT A

Golden Parachute Provision

(a) In the event
that the Executive shall become entitled to payments and/or benefits
provided by this Agreement or any other amounts in the “nature
of compensation” (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the
Company, any person whose actions result in a change of ownership or
effective control covered by Code Section 280G(b)(2) or any person
affiliated with the Company or such person) as a result of such
change in ownership or effective control (collectively the “Company
Payments”), and such Company Payments will be subject to the
tax (the “Excise Tax”) imposed by Code Section 4999
(and any similar tax that may hereafter be imposed by any taxing
authority) the Company shall pay to the Executive an additional
amount (the “Gross-Up Payment”) such that the net amount
retained by the Executive, after deduction of any Excise Tax on the
Company Payments and any U.S. federal, state, and for local income or
payroll tax upon the Gross-up Payment provided for by this paragraph
(a), but before deduction for any U.S. federal, state, and local
income or payroll tax on the Company Payments, shall be equal to the
Company Payments. Any Gross-Up Payments hereunder shall be remitted,
within the time specified, to the Executive but in no event later
than the end of the calendar year following the calendar year in
which the Executive remits the related taxes to the appropriate
government authority.

Notwithstanding the
foregoing, if it shall be determined that the Executive is entitled
to a Gross-Up Payment, but that if the Company Payments (other than
that portion valued under Treasury Regulation Section 1.280G,
Q&A 24(c)) (the “Cash Payments”) are reduced by the
amount necessary such that the receipt of the Company Payments would
not give rise to any Excise Tax (the “Reduced Payment”)
and the Reduced Payment would not be less than 92.5% of the Cash
Payment, then no Gross-Up Payment shall be made to the Executive and
the Cash Payments, in the aggregate, shall be reduced to the Reduced
Payment. If the Reduced Payment is to be effective, payments shall be
reduced in the following order (1) acceleration of vesting of
any stock options for which the exercise price exceeds the then fair
market value, (2) any cash severance based on a multiple of Base
Salary or Bonus, (3) any other cash amounts payable to the
Executive, (4) any benefits valued as parachute payments; and
(5) acceleration of vesting of any equity not covered by
(1) above.

In the event that the
Internal Revenue Service or court ultimately makes a determination
that the excess parachute payments plus the base amount is an amount
other than as determined initially, an appropriate adjustment shall
be made with regard to the Gross-Up Payment or Reduced Payment, as
applicable to reflect the final determination and the resulting
impact on whether the preceding paragraph applies.

(b) For purposes
of determining whether any of the Company Payments and Gross-up
Payments (collectively the “Total Payments”) will be
subject to the Excise Tax and the amount of such Excise Tax, (x) the
Total Payments shall be treated as “parachute payments”
within the meaning of Code Section 280G(b)(2), and all
“parachute payments” in excess of the “base amount”
(as defined under Code Section 280G(b)(3)) shall be treated as
subject to the Excise Tax, unless and except to the extent that, in
the determination of the Company’s independent certified public
accountants or tax counsel selected by such accountants or the
Company (the

“Accountants”) such Total Payments (in
whole or in part) either do not constitute “parachute
payments,” including giving effect to the recalculation of
stock options in accordance with Treasury
Regulation Section 1.280G-1, Q&A 33, represent
reasonable compensation for services actually rendered within the
meaning of Code Section 280G(b)(4) in excess of the “base
amount” or are otherwise not subject to the Excise Tax, and
(y) the value of any non-cash benefits or any deferred payment
or benefit shall be determined by the Accountants in accordance with
the principles of Code Section 280G. To the extent permitted
under Revenue Procedure 2003-68 or other applicable rules, the value
determination shall be recalculated to the extent it would be
beneficial to the Company. The determination of the Accountants shall
be final and binding upon the Company and the Executive, except to
the extent provided herein with regard to Internal Revenue Service
determinations. The Company shall be responsible for all charges of
the Accountants.

(c) In the event
that the Excise Tax is subsequently determined by the Accountants to
be less than the amount taken into account hereunder at the time the
Gross-up Payment is made, the Executive shall repay to the Company,
at the time that the amount of such reduction in Excise Tax is
finally determined, the portion of the prior Gross-up Payment
attributable to such reduction (plus the portion of the Gross-up
Payment attributable to the Excise Tax and U.S. federal, state and
local income tax imposed on the portion of the Gross-up Payment being
repaid by the Executive if such repayment results in a reduction in
Excise Tax or a U.S. federal, state and local income tax deduction),
plus interest on the amount of such repayment at the rate provided in
Code Section 1274(b)(2)(B). The Company shall be responsible for all
charges of the Accountant.

In the event that the
Excise Tax is later determined by the Accountant or the Internal
Revenue Service to exceed the amount taken into account hereunder at
the time the Gross-up Payment is made (including by reason of any
payment the existence or amount of which cannot be determined at the
time of the Gross-up Payment), the Company shall make an additional
Gross-up Payment in respect of such excess (plus any interest or
penalties payable with respect to such excess) at the time that the
amount of such excess is finally determined.

(d) The Gross-up
Payment or portion thereof provided for in subsection (c) above
shall be paid not later than the 30th day following an event
occurring which subjects the Executive to the Excise Tax; provided,
however, that if the amount of such Gross-up Payment or portion
thereof cannot be finally determined on or before such day, the
Company shall pay to the Executive on such day an estimate, as
determined in good faith by the Accountant, of the minimum amount of
such payments and shall pay the remainder of such payments (together
with interest at the rate provided in Code Section 1274(b)(2)(B)),
subject to further payments pursuant to subsection (c) hereof,
as soon as the amount thereof can reasonably be determined, but in no
event later than the 90th day after the occurrence of the event
subjecting the Executive to the Excise Tax. In the event that the
amount of the estimated payments exceeds the amount subsequently
determined to have been due, such excess shall constitute a loan by
the Company to the Executive, payable on the fifth day after demand
by the Company (together with interest at the rate provided in Code
Section 1274(b)(2)(B)).

(e) In the event
of any controversy with the Internal Revenue Service (or other taxing
authority) with regard to the Excise Tax, the Executive shall permit
the Company to control

issuesrelated to the Excise Tax
(at its expense). In the event of any conference with any taxing
authority as to the Excise Tax or associated income taxes, the
Executive shall permit the representative of the Company to accompany
the Executive, and the Executive and the Executive’s
representative shall cooperate with the Company and its
representative.

(f) The Executive
shall promptly deliver to the Company copies of any written
communications, and summaries of any verbal communications, with any
taxing authority regarding the Excise Tax covered by this provision.

(g) Nothing in
this Section is intended to violate the Sarbanes-Oxley Act and to the
extent that any advance or repayment obligation hereunder would do
so, such obligation shall be modified so as to make the advance a
nonrefundable payment to the Executive and the repayment obligation
null and void to the extent required by such Act.

EXHIBIT B

DRAFT FORM OF RELEASE

EXHIBIT 10.3

CHAMPION ENTERPRISES, INC.

EXECUTIVE OFFICER SEVERANCE PAY
PLAN

(EFFECTIVE AS OF DECEMBER 1,
2004)

INTRODUCTION

The
purpose of the Plan is to enable Champion Enterprises, Inc., to offer

certainprotections to its executive
officers if their employment is terminated

bythe
Company without Cause or by the Participant with Good Reason.
Capitalized

termsand
phrases used herein shall have the meanings ascribed thereto in

Article I.

ARTICLE I.

DEFINITIONS

1.1
AFFILIATE shall mean each of the following:

(a) any Subsidiary;

(b) any Parent;

(c) any
corporation, trade or business (including, without

limitation,
a partnership or limited liability company) which is directly

or
indirectly controlled 50% or more (whether by ownership of stock,

assets
or an equivalent ownership interest or voting interest) by the

Company
or one of its Affiliates; and

(d) any other
entity in which the Company or any of its Affiliates

has
a material equity interest and which is designated as an "Affiliate"

by
resolution of the Committee.

1.2
BASE SALARY shall mean the Participant's annual base compensation

ratefor
services paid by the Company to the Participant at the time
immediately

priorto
the Participant's termination of employment, as reflected in the